In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating …-maximizing central bank should adopt flexible headline inflation targeting a target for headline CPI inflation with some weight on the …

The evidence on the inflation impact of aging is mixed, and there is no evidence regarding the volatility of inflation …. Based on advanced economies' data and a DSGE-OLG model, we find that aging leads to downward pressure on inflation and … higher inflation volatility. Our paper is also the first, using this framework, to discuss how aging affects the transmission …

Standard New Keynesian (NK) models feature an optimal inflation target well below two percent, limited welfare losses …-run Phillips curve between inflation and unemployment and a trade-off between price distortions and output hysteresis that change … the welfare-maximizing inflation level. For a plausible set of parameters, the optimal inflation target is in excess of …

Upward sloping yield curves are hard to reconcile with the positive association between income and inflation (the … Phillips curve) in consumption-based asset pricing models. Using US and UK data, this paper shows inflation is negatively … the importance of monetary policy, predicting that a permanently low growth and low inflation environment would …

A number of industrialized countries have recently offered inflation-indexed bonds. Some members of another group of … countries that had earlier adopted more comprehensive indexation in response to high inflation have taken steps to reduce the … use of inflation-indexed bonds, and relates these to the experiences of various issuers. The paper also considers some …

As with many monetary policy frameworks, inflation targeting is subject to the well-known problem of inflation bias …. With inflation targeting, however, the bias becomes apparent not as inflation above desired levels, but as a wedge between … the announced target and observed inflation. This inconsistency could render the framework neither credible nor …

The global financial crisis has exposed the limitations of a conventional inflation targeting (IT) framework in … inflation. Accordingly, we investigate possible refinements to the IT framework by incorporating financial stability …