shows not only that greater independence is associated with lower inflation, but also that the central bank's rights not to … finance the government and to set interest rates independently increase its effectiveness. The role of inflation targeting and … the distinction between price level and inflation targeting are also analyzed …

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 …

Japan suffered a very high inflation rate in 1973-74. The CPI inflation rate rose to near 30% in 1974, the highest rate …, the oil crisis is blamed for the 1973-74 high inflation. However, due to monetary policy decisions in 1972-73, the … inflation rate had already exceeded 10% before the onset of the oil crisis in October 1973. These decisions include the interest …

After the economic reforms that followed the National Revolution of the 1950s, Bolivia seemed positioned for sustained … and a fixed exchange rate policy during the 1970s led to a debt crisis that began in 1977. From 1977 to 1986, Bolivia lost … almost all the gains in GDP per capita that it had achieved since 1960. In 1986, Bolivia started to grow again, interrupted …

This paper shows that the optimal extraction of seigniorage implies a strong tendency for inflation to fall over time … inflation rate each period in a discretionary manner. One way to view the model is as a synthesis of the quot …;tax-smoothingquot; theory of government deficits, which predicts that the inflation tax follows approximately a martingale, and of models of …

financed by money creation and to destabilizing expectations dynamics that can occasionally divorce inflation from fundamentals …. Our maximum likelihood estimates allow us to interpret observed inflation rates in terms of variations in the deficits … that cut inflation without reforming deficits. Our estimates also allow us to infer the deficit adjustments that seem to …

Inflation targeting is shown to imply inflation forecast targeting: the central bank's inflation forecast becomes an … explicit intermediate target. Inflation forecast targeting simplifies both implementation and monitoring of monetary policy …. The weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target …

current and future inflation innovations to revalue government debt, reducing reliance on distorting taxes; (2) the role of … inflation in optimal fiscal financing increases with the average maturity of government debt; (3) as average maturity rises, it … is optimal to tradeoff inflation for output stabilization; (4) inflation is relatively more important as a fiscal shock …

inflation and activity. If policy makers are guided by the welfare criterion of the representative household, globalization … forces also lead monetary policy to be more aggressive with regard to inflation fluctuations but, at the same time, more …

We argue that the Great Inflation experienced by both the United Kingdom and the United States in the 1970s has an … common doctrine underlying the systematic monetary policy choices in each country. The nonmonetary approach to inflation …