rates, and the shift in the response of the term structure of interest rates to inflation and output. Although the theory …

inflation rates in shaping the response of real exchange rates to shocks. We document two facts about inflation … rate is a poor predictor of future inflation rates. We estimate a medium-size DSGE open-economy model that accounts … that accounts for the dynamics of exchange rates and their covariance with inflation are disturbances to the foreign demand …

This paper deals with the relationship between inflation targeting and exchange rates. I address three specific issues …: first, I analyze the effectiveness of nominal exchange rates as shock absorbers in countries with inflation targeting. This … volatility is different in countries with an inflation targeting regime than in countries with alternative monetary policy …

, and the exchange rate is priced by uncovered interest parity, the real exchange rate is determined by expected inflation …-squares learning path for the real exchange rate implied by inflation and output gap data exhibits the real depreciation of the 70s …

-sample estimation. In contrast to Orphanides (2002, 2003), I find that the Fed's response to the real-time forecast of inflation was … (2000). However, the response to inflation was strong before 1973 and gradually regained strength from the early 1980's …

stable inflation behavior will be generated -- is incorrect. This is because New Keynesian (NK) models are typically … consistent with the existence of RE paths with explosive inflation rates (in addition to one or more stable paths) that normally … imply the absence of explosive inflation. That result does not, however, justify negative conclusions about NK analysis. For …

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 …

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 …

The most important conclusion of this paper is that the growth rate of the money supply influences the U.S. inflation …, help to explain why U.S. inflation was so low in 1976 and why it accelerated so rapidly in 1978. Granger causality tests … indicate that lagged exchange rate changes influence inflation, but lagged inflation does not cause exchange rate changes. A …