inflation expectations. We develop this measure using assumptions common in economic analysis of open economies. Using quarterly …

. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also characterize the … gains from making a credible commitment to fight inflation. In contrast to conventional wisdom, we show that gains from …

Policy rules that are consistent with inflation targeting are examined in a small macroeconomic model of the US economy … implicit instrument rules, may be closer to actual operating procedures of inflation-targeting central banks. We find that … inflation forecasts are central for good policy rules under inflation targeting. Some simple instrument and targeting rules do …

inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable … loss function (corresponding to flexible inflation targeting) is discussed, including the index and level for the inflation … price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are …

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 …

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 …

A relation between inflation and the path of average marginal cost (often measured by unit labor cost) implied by the … subject of extensive econometric estimation and testing. Standard theoretical justifications of this form of aggregate … is shown to again take the standard "new-Keynesian" form, but with an elasticity of inflation with respect to real …

perspective on the linkages among monetary policy, inflation, and the business cycle. It is argued that the adoption of an …

The paper provides an integrated analysis of globalization effects on the inflation-output tradeoff and monetary policy … flatten the Phillips curve, the tradeoff between inflation and activity. Second, the same globalization forces lead the … welfare-based monetary policy to be more aggressive with regard to inflation fluctuations, and at the same time, more benign …