for the unemployment-inflation trade- off and for the conduct of monetary policy. We proceed in two steps. We first leave … firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence of labor … market frictions and real wage rigidities. We show the nature of the tradeoff between inflation and unemployment …

for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i …

setting by firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence … of real wage rigidities. We show the nature of the tradeoff between inflation and unemployment stabilization, and we draw …

approach gradually a new steady state with positive average inflation. Around that steady state, the optimal policy implies … well defined (second-best) paths for inflation and output in response to shocks to the natural rate. Under plausible …

Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and … inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new … trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the …