by the announcement of inflation targeting in 1991 when estimating the effects of monetary policy. For instance, we find … that a 100-basis-point increase in our new shock series leads to a 1.0 per cent decrease in real GDP and a 0.4 per cent … fall in the price level, while not accounting for the break leads to a permanent decrease in real GDP and a price puzzle …

We build a model for bond yields based on a small-scale representation of an economy with secular declines in inflation …, the real rate and output growth. Long-run restrictions identify nominal shocks that influence long-run inflation but do … results show that, before the anchoring of inflation around the mid-1990s, nominal shocks lifted the output gap and inflation …

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 … inflation are lower and monetary policy is constrained by the effective lower bound. We discuss how fiscal policy can be used to …

We provide a decomposition of nominal yields into real yields, expectations of future inflation and inflation risk … premiums when real bonds or inflation swaps are unavailable or unreliable due to their relative illiquidity. We combine nominal … yields with surveys of inflation forecasts within a no-arbitrage model where conditional expectations are latent but spanned …

We propose a portfolio-balance model of the yield curve in which inflation is determined through an interest rate rule … Taylor principle implies that short-term nominal rates are adjusted more than one for one in response to changes in inflation …, the real return on nominal bonds depends positively on inflation. In equilibrium, inflation increases when there is an …

This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic … money demand and the distribution of money holdings across households, and study the effects of inflation under the implied … inflation are on average 40% smaller compared to a complete markets, representative agent economy, and that inflation induces …

a powerful effect on both output growth and inflation. Second, conditional on available estimates of the impact of the …