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 …

to estimate how price increases can be divided between quality growth and price inflation. I find that less than one … inflation close to inflation measured by the official index. I conclude that, according to Bils' methodology, the quality bias … is not an important source of potential mismeasurement of CPI inflation in Canada. …

Inflation can affect both the dispersion of commodity-specific price levels across locations (relative price … variability, RPV) and the dispersion of inflation rates (relative inflation variability, RIV). Some menu-cost models and models of … consumer search suggest that the RIV-inflation relationship could differ from the RPV-inflation relationship. However, most …

Various papers have suggested that Price-Level targeting is a welfare improving policy relative to Inflation targeting …

The purpose of this paper is to make a quantitative contribution to the inflation versus price level targeting debate …. It considers a policy-maker that can set policy either through an inflation targeting rule or a price level targeting … that price level targeting dominates inflation targeting, although it can lead to much more volatile inflation depending on …

price-level targeting relative to inflation targeting for business cycle stabilization and mitigating the effects of the … the stationary nature of the price level under price-level targeting by observing their inflation forecasting behaviour in … outcomes than inflation targeting. Our main result suggests that participants formulate inflation expectations consistent with …

Like the gold standard, price level targeting (PT) involves not letting past deviations of inflation be bygones; both … output volatility and frequent resets. These problems reduce the expectational advantage of PT over inflation targeting …

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 …

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 …