correcting for measurement error, wages appear to be very sticky. In the average quarter, the probability that an individual will … consumer price inflation rate …

In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize … is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting … headline inflation, assigns zero weight to import prices …

This paper evaluates the success of Inflation Targeting on inflation and growth on a large panel data set of both … evidence to show that the support for a successful Inflation Targeting policy is very weak or non-existent. We use various … the process by which inflation targeting is hypothesised to influence inflation and growth, Section 3 surveys this …

concludes with an empirical application to consumer price inflation in Germany, France and Italy, and re-examines the extent to … which ﾑobservedﾒ inflation persistence at the aggregate level is due to aggregation and/or common unobserved factors. Our … persistence of the aggregate inflation …

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting a target based on headline rather …

Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations …