Woodford (2007) argues that it is not appropriate to regard inflation in the steady state of New Keynesian models as …-rate policy rule determines steady-state inflation. In this paper, I offer an alternative interpretation of steady-state behavior …, according to which it is appropriate to regard steady-state inflation as determined by steady-state money growth. The argument …

Woodford (2007) argues that it is not appropriate to regard inflation in the steady state of New Keynesian models as …-rate policy rule determines steady-state inflation. In this paper, I offer an alternative interpretation of steady-state behavior …, according to which it is appropriate to regard steady-state inflation as determined by steady-state money growth. The argument …

We consider what, if any, relationship there is between monetary aggregates and inflation, and whether there is any … paribus unitary relationship between inflation and money growth. Simulations of a New Keynesian model suggest that we should … allowance needed for the phase shift in the relationship between monetary growth rates and inflation. While financial innovation …

We consider what, if any, relationship there is between monetary aggregates and inflation, and whether there is any … paribus unitary relationship between inflation and money growth. Simulations of a New Keynesian model suggest that we should … allowance needed for the phase shift in the relationship between monetary growth rates and inflation. While financial innovation …