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 …

period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence … cost determination. This set-up produces realistic labor market statistics together with inflation persistence …

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 …

inflation targeting, exchange rate management benefits households in the tradable goods sector but in the long run these …

Real wages are a key determinant of marginal costs. The latter themselves are a driving force of inflation. We ask how … wages and labor market shocks feed into the inflation process. We model search and matching frictions in the labour market …

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 …

- although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this persistency … setting (in which real variables not only affect inflation, but are also influenced by it), standard wage-price staggering …

and real wage rigidities. In our analysis, we focus on the differentials in inflation and unemployment between countries … inflation and unemployment differentials. Second, we find that asymmetries in labor market structures tend to increase the … volatility of both inflation and unemployment differentials. Finally, we show that it is important to take into account the …