macroeconomic frameworks. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also … characterize the gains from making credible commitments to fight inflation and consider the implications of frictions such as …

We study how changes in the steady-state real interest rate affect the optimal inflation target in a New Keynesian DSGE … model with trend inflation and a lower bound on the nominal interest rate. In this setup, a lower steady-state real interest … rate increases the probability of hitting the lower bound. That effect can be counteracted by an increase in the inflation …

inflation, imperfect indexation, and a lower bound on the nominal interest rate. In this setup, a decrease in the steady … the inflation target of eighttenths the size of the drop in the real natural rate of interest is warranted. Absent an … increase in the inflation target, and assuming the effective lower bound prevents the European Central Bank from implementing …

We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in …-for-one: increases in the optimal inflation rate are generally lower than declines in the steady state real interest rate. Our approach … allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while …

We address this question using an estimated New Keynesian DSGE model of the Euro Areawith trend inflation, imperfect … anadjustment of the monetary policy strategy. Under an unchanged monetary policy rule, anincrease in the inflation target of eight … tenth the size of the drop in the real natural rate ofinterest is warranted. Absent an increase in the inflation target, and …

inflation, imperfect indexation, and a lower bound on the nominal interest rate. In this setup, a decrease in the steady … the inflation target of eighttenths the size of the drop in the real natural rate of interest is warranted. Absent an … increase in the inflation target, and assuming the effective lower bound prevents the European Central Bank from implementing …

We study how changes in the steady-state real interest rate affect the optimal inflation target in a New Keynesian DSGE … model with trend inflation and a lower bound on the nominal interest rate. In this setup, a lower steady-state real interest … rate increases the probability of hitting the lower bound. That effect can be counteracted by an increase in the inflation …

inflation, imperfect indexation, and a lower bound on the nominal interest rate. In this setup, a decrease in the steady … the inflation target of eight-tenths the size of the drop in the real natural rate of interest is warranted. Absent an … increase in the inflation target, and assuming the effective lower bound prevents the European Central Bank from implementing …