socially optimal allocation requires a commitment to inflation. We illustrate this idea through a nominal version of the …

. The risk of future regime shifts has encompassing effects on equilibrium. Inflation is systematically higher than it would … stability. This inflation bias is increasing in the real value of government debt. Regime-switching probabilities are not … interest rate sufficiently moderately when inflation increases. Lower fiscal dominance risk, in turn, mitigates the inflation …

monetary and credit aggregates are very often selected among the top predictors of inflation, with their predictive power … and credit variables in forecasting inflation, even if their information content is diluted in a much broader pool of …

Japan long-term inflation expectations are well anchored and, generally, increasingly so over the past decade. When … help anchoring inflation expectations. We use survey data on long-term inflation expectations in 15 industrial countries … since the early nineties to investigate how well anchored are inflation expectations. We find that in all countries except …

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the … inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model …-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who …

economic activity, inflation and government debt in face of an occasionally binding lower bound on the nominal interest rate in … policy, the optimal fiscal policy rule features a strong counter-cyclical response to the deviation of inflation from the … inflation significantly improves welfare and reduces the lower-bound frequency. In addition, the optimal simple monetary and …