The paper discusses policy relevant models, going from (1) chronic inflation in the 20th century after WWII, to (2 … associated with chronic deflation. The discussion highlights the importance of expectations and liquidity, and warns about the …

. Key to our estimation strategy is the use of survey-based expectations for inflation and output. We identify accommodating … monetary policy may have played role in anchoring inflation expectations. Shocks and policy regimes jointly drive the … shocks shift to the low volatility regime around 1985 whereas inflation shocks do so only around 1990, suggesting active …

account for most of the variance of inflation, output, and hours …

significant role of expectations of future policy actions in the monetary transmission mechanism, and the importance for the …

: pricing, waiting and expectations. The pricing discussion centers on the recognition that firms are price setters. This … expectations literature is being extended to more ambitious stochastic models of policy. If agents extrapolate current disturbances …

optimal inflation rate appears to be highly sensitive to the assumed degree of price stickiness. Within the window of … available estimates of price stickiness (between 2 and 5 quarters) the optimal rate of inflation ranges from -4.2 percent per …, mild deflation emerges as a robust Ramsey prediction. In light of the finding that the Ramsey-optimal inflation rate is …

variety of aggregate supply specifications. Theoretical applications concerning price level determinacy and inflation …