affects how agents learn from new information. We show that as inflation has recently risen in advanced economies, both … households and firms have become more attentive and informed about inflation, leading them to respond less to exogenously … provided information about inflation and monetary policy. We also study the effects of RCTs in countries where inflation has …

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 …

skilled workers being more complementary to capital than substitutable unskilled workers are (CSC channel). Strict inflation … introduce a trade-off between stabilizing inflation and aggregate demand …

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 …

state contingent inflation taxes/subsidies to smooth those rents. Hence, in the optimal Ramsey plan, inflation deviates from … zero and the optimal volatility of inflation is an increasing function of firing costs. The optimal rule should react to … employment alongside inflation …