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 …

around 10% of its products. To assess the implications of partial price synchronization for inflation dynamics, we develop a …

that costpush shocks play an important role in understanding historical changes in inflation persistence. …

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

output and inflation, as observed in a vectorautoregression analysis. In contrast to backward indexation to past inflation …, which is often assumed in the literature, sticky information leads to a hump-shaped response in the inflation of flexibly …

We propose a simple, model-free way to measure price selection and its impact on inflation. Price selection exists when … selection, increases (decreases) in inflation can be amplified because adjusting prices tend to originate from levels far below … for around 36% of inflation variance in the United Kingdom and the United States, and 28% in Canada. Price selection is …

then provide a forecast evaluation for GDP growth and CPI inflation since 1982: we compare the staff forecasts with those …

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 …