Since bank deposits and currency are substitutes and banks have monopoly power, higher nominal interest rates lead to … higher deposit spreads. This raises the cost of transaction services, increases bank profits and attracts entry into the … banking sector. Taking these effects into account, a one percentage point increase in inflation has a welfare cost of 0 …

of central bank conservatism. A radical-populist central banker who cares not at all about inflation (alternatively, who … and central bank conservatism on economic performance. Several striking conclusions emerge. In relatively centralized … labor markets employment and output are decreasing and inflation is initially increasing and then decreasing in the degree …

Estimating the liquidity differential between inflation-indexed and nominal bond yields, we separately test for time …-varying real rate risk premia, inflation risk premia, and liquidity premia in U.S. and U.K. bond markets. We find strong, model … independent evidence that real rate risk premia and inflation risk premia contribute to nominal bond excess return predictability …

policies will adjust. Temporarily explosive debt has no effect on inflation if households expect all adjustments to occur … targeting inflation to stabilizing debt, then debt feeds directly into the path of inflation and monetary policy can no longer … control inflation. News that reduces expected primary surpluses can bring future inflation into the present, well before the …

impact of time-varying inflation. Consistent with the Modigliani-Cohn hypothesis, we find that the level of inflation …

pressure on inflation expectations and poses a substantial challenge to a central bank pursuing an inflation target. The … a burst of inflation that devalues the existing nominal debt stock. The probability of this outcome places upward … distribution of outcomes for the path of future inflation has a fat right tail, revealing that only a small set of outcomes imply …

countries with low inflation, the raw relationship between average inflation and the growth rate of money is tenuous at best … elasticities implied by theories of Baumol-Tobin and Miller-Orr. Finally, the sample after 1990 shows considerably less inflation … variability, worsening the fit of a one-for-one relationship between money growth and inflation, and generates a fairly low …

. Inflation may be positive throughout, so the absence of deflation is not evidence against a liquidity trap. Output, on the other …

This paper examines inflation dynamics in the United States since 1960, with a particular focus on the Great Recession …. A puzzle emerges when Phillips curves estimated over 1960-2007 are used to predict inflation over 2008-2010: inflation … by theories of costly price adjustment: we measure core inflation with the median CPI inflation rate, and we allow the …