;tax-smoothingquot; theory of government deficits, which predicts that the inflation tax follows approximately a martingale, and of models of …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 …

propagated abroad. In previous work, we built on the theory of rational bubbles to develop a framework to think about the origins …

common monetary authority chooses inflation for the union, also without commitment. We first describe the existence of a … wisdom that all countries should prefer a union with low-debt members, as such a union can credibly deliver low inflation …

This paper analyzes the long-run determinants of inflation differentials in a monetary union. First, we aim at … establishingsome stylized facts relating the regional dispersion in headline inflation rates in the euro area as well as in the main … the primary cause of price and inflation differentials, with shocks to productivity in the traded sector being largely …

zero bound affects the target inflation rate of the other country. The direction of the effect depends on whether goods …-rate rules. Our finding is that targeting the price level yields higher welfare than targeting the inflation rate, and that it is …