distinguishing characteristic of generally greater scalability and lower marginal costs than tangible investment. We show evidence … that this may have contributed to more elastic aggregate supply in recent years, which is consistent with lower inflation …

stability under adaptive learning for interest rate rules that respond to inflation measures differing in their degree of price … stickiness. We find that rules responding to headline inflation measures that assign a positive weight to the inflation of the … the inflation of the sector with high price stickiness. By this we mean that they are more prone to induce non …

flexible prices. Second, under the optimal policy the volatility of non-tradable inflation is close to zero. Third, stabilizing … nontradable inflation is optimal regardless of the financial structure of the small open economy. Even for a moderate degree of …

shocks this model generates the empirically observed slow (inertial) and prolonged (persistent) reaction of the inflation … shocks mostly through a change in the long-run or inflation updating component of their pricing policies. With staggered … pricing policies there is a time lag before this is reflected in aggregate inflation …

Exchange rate-based inflation stabilization (ERBS) policies are associated with a boom-recession cycle in economic … forward-looking pricing behavior without inflation stickiness and attribute the slow decline in inflation to the consumption …-looking components of inflation weigh approximately equally in pricing behavior, and therefore, that inflation is partially sticky. The …

Identifying determinants of the output-inflation tradeoff has long been a key issue in business cycle research. We … provide evidence that in countries with greater restrictions on capital mobility, a given reduction in the inflation rate is … Arrangements and Exchange Restrictions. Estimates of the output-inflation tradeoff are taken from previous studies, viz., Lucas …

relates average unemployment to average wage inflation; the curve is virtually vertical for high inflation rates but becomes … flatter as inflation declines. Second, macroeconomic volatility shifts the Phillips curve outward, implying that stabilization …, at low inflation. Fourth, when inflation decreases, volatility of unemployment increases whereas the volatility of …

test. In addition, this model is able to replicate the dynamic behavior of inflation and output found in the data …