We develop an experimental framework to investigate the quantity theory of money and the real effects of inflation in … an economy where money serves as a medium of exchange. We test the classical view that inflation reduces output and … welfare by taxing monetary exchange. Inflation is engineered by constant money growth. We conduct three treatments, where the …

We examine the relative ability of simple inflation targeting (IT) and price level targeting (PLT) monetary policy … rules to minimize both inflation variability and business cycle fluctuations in Canada for shocks that have important … persistent cost-push pressures in the economy leading to a significant deterioration in the inflation - output gap trade …

While two strands of the literature suggest that PPI inflation, in addition to or instead of CPI inflation, should be a … temporary, the standard monetary policy rule that does not target the PPI inflation may have become increasingly problematic. …

Elevated inflation can threaten the credibility of central banks and increase the risk that inflation expectations do … not remain anchored. Wage-price spirals might develop in such an environment, and high inflation could become entrenched …-varying propagation of inflationary shocks that improves forecasting performance of inflation and wage growth. Central bank credibility is …

This paper examines the value of direct communication to households about inflation and the uncertainty around … inflation statistics. All types of information about inflation are effective at immediately managing inflation expectations …, with information about outlooks being more effective and more relevant than that about recent inflation and Bank targets …

pushes up inflation expectations so as to offset the opposite effect due to the lower bound risk. …

The long-run relation between growth and inflation has not yet been studied in the context of nominal price and wage … integrate staggered price- and wage-setting into an endogenous growth framework. In this setting, growth and inflation are … linked via the incentive to innovate. For standard calibrations, the linkage is strong: as trend inflation shifts from -5 to …

We study how within-store price variation changes with inflation, and whether households exploit it to attenuate the … inflation burden. We use micro price data for food products sold by 91 large multi-channel retailers in 10 countries between … discounts grew at a much lower average rate than regular prices, helping to mitigate the inflation burden. By contrast …

by the announcement of inflation targeting in 1991 when estimating the effects of monetary policy. For instance, we find …

interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that …, with banking, inflation generates smaller welfare costs. Second, we show that, lowering inflation improves welfare not just … nature of intermediation cost is critical for accurately assessing the welfare gain of lowering the inflation target …