This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective …. Situations in which the fiscal authority is able to exploit the central bank's commitment to zero inflation sre examined. …

The paper extends previous analysis of closed-economy inflation targeting to a small open economy with forward … for monetary policy. The paper compares targeting of CPI and domestic inflation, strict and flexible inflation targeting …, and inflation-targeting reaction functions and the Talyor rule. The optimal monetary policy response to several different …

The paper advances a simple and tractable Wicksellian model of inflation, in which the price level is determined by the …

Policy rules that are consistent with inflation targeting are examined in a small macroeconometric model of the US … imply implicit instrument rules, may be closer to actual operating procedures of inflation-targeting central banks. WE find … that inflation forecasts are central for good policy rules under inflation targeting. Some simple instrument and targeting …

, inflation is higher and the return on money decreases. In equilibrium, no arbitrage amounts to equating the real return of both … inflation and asset returns is in the spirit of research in finance initiated in the early 80's. (Copyright: Elsevier) …