linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has emerged is … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity …

money now can cause higher inflation in the future. In spite of the qualifier ‘unpleasant,' this result is positive in … central bank to delay inflation by issuing debt to finance part of the fiscal deficit. The analysis is conducted in the … optimal to delay inflation, it does so knowing that it would result in higher inflation in the future. The central result of …

inflation follow from an international acceptance of these ideas? And how did a consensus theoretical model develop in academia … model) reinforces key advances: the priority for price stability, the targeting of core rather than headline inflation, the … importance of credibility for low inflation, and preemptive interest rate policy supported by transparent objectives and …

inform the fiscal rules that countries choose to follow. It makes two points: (1) monetary policy control of inflation …

We develop and estimate a general equilibrium model in which monetary policy can deviate from active inflation …

. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also characterize the … gains from making a credible commitment to fight inflation. In contrast to conventional wisdom, we show that gains from …

-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 …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …