monetary arrangements, a flexible exchange rate and an inflation target, are contrasted both with a unilateral adoption by …

inflation tax (the reduction in the real value of the stock of base money due to inflation and (4) the operating profits of the … doing this can we appreciate the financial constraints on the Central Bank’s ability to pursue and achieve an inflation …

inflation rate below the target inflation rate (the normal steady-state rate of inflation under the Taylor rule), there also … trap steady state. Along these solution orbits, periods of rising inflation and excess demand alternate with periods of … falling inflation and excess capacity. For some solution orbits, nominal interest rates are at the zero lower bound for all …

membership. It should also be sufficient. 3) Convergence, prior to the adoption of the euro, of an EMU candidate’s inflation rate … to its euro area equilibrium inflation rate is helpful but not essential. 4) Real convergence is irrelevant for EMU … parity with the euro); (b) a short-term inflation target (inflation, for at least one year, to be no more than 1.5% above the …