solutions such as the conservative central banker and optimal inflation contracts. Our theoretical model also shows how an … inflation targeting range should be set and how it should respond to changes in the nature of shocks to the economy …

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 …

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 …

common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a … wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation …

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 …

inflation, and that the optimal monetary policy is that which maximizes real balances. We also show that the real rate of … interest is not invariant to monetary policy: inflation lowers the real rate …

-pricing theory, is calibrated to analyze the effects of monetary policy and financial innovation. We show that inflation can raise … output, employment and investment, plus improve housing and stock markets. For the baseline calibration, optimal inflation is …