positive if the central bank adopts closed-loop strategies that raise the real interest rate when inflation is above target … owing to fiscal deviations. More aggressive defence of the inflation target implies lower debt and higher welfare. Simple …

through bequest motives, monetary policy has the potential to affect steady-state properties even if money is neutral in the … long run. In particular, we show that if monetary policy reacts aggressively to inflation, this supports a steady state … where inflation is close to the central bank's target. However, the same aggressive policy simultaneously favours the …

This paper studies the impact government expenditure has on inflation by examining an augmented Phillips curve implied …, Changes in government expenditure account for a substantial portion of inflation variations and provide new insights into the … "missing disinflation" puzzle, We also find that inflation and inflation expectations respond negatively to fiscal spending …

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

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

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 …

Inflation dynamics in advanced countries have produced two consecutive puzzles during the years after the global … financial crisis. The first puzzle emerged when inflation rates over the period 2009-11 were consistently higher than expected … today - was initially observed in 2012, when inflation rates in advanced countries were weakening rapidly despite the …

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 …

the average anticipated path of policy responses to inflation is subject to a lower bound of unity. This result helps … explain how bond rates may exhibit stable responses to inflation, even in periods of passive policy. Another possible … explanation is time-varying term premiums with risk pricing that depends on inflation. The authors present a no-arbitrage model of …