disinflation under inflation targeting policies. The analysis is motivated by the disinflation performance of many inflation … episode price-setting firms' expect inflation to be highly persistent and opt for backward-looking indexation. As the central … bank acts to bring inflation under control, price-setting firms revise their estimates of the degree of persistence. Such …

a rationale for the practice of inflation zone targeting. We show that the presence of either zone-quadratic preferences … or a zone-linear relationship between inflation and economic activity provides strong incentives to deviate from … structure and relative preference towards economic stability in determining the width of the implied targeted inflation zone …

. Deflation subsided by 2005. As soon as inflation appeared to stabilize near a rate of zero, the Bank of Japan rapidly reduced …

. Deflation subsided by 2005. As soon as inflation appeared to stabilize near a rate of zero, the Bank of Japan rapidly reduced …