Evaluating inflation-targeting monetary policy is more complicated than checking whether inflation has been on target …, because inflation control is imperfect and flexible inflation targeting means that deviations from target may be deliberate in … variability of the inflation-gap and output-gap forecasts can be used to evaluate policy ex ante, that is, taking into account the …

We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in …-for-one: increases in the optimal inflation rate are generally lower than declines in the steady-state real interest rate. Our approach … allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while …

target inflation. We find that when the government cannot commit to its policies, the greater transparency of the exchange …

crisis, modeled as a situation where the fiscal outlook is inconsistent with both stable inflation and no sovereign default …'s balance sheet can interfere with each of these channels, stabilizing inflation and economic activity. The power of QE comes …

determine inflation in this regime, so I base the analysis on the fiscal theory of the price level. I find that monetary policy … can peg the nominal rate, and determine expected inflation. With sticky prices, monetary policy can also affect real … interest rates and output, though higher interest rates raise output and then inflation. The conventional sign requires a …

This paper investigates the hypothesis that surprise changes in the money supply and anticipated inflation (the Mundell … surprises and expected real interest or an inverse relationship between anticipated inflation and expected real interest. These …