In theory, monetary policies that target the price level, as opposed to the inflation rate, should be highly effective … such a policy, if the short-term interest rate is constrained at zero and the inflation rate declines below its trend, the … public expects that policy will eventually engineer a period of above-trend inflation that restores the price level to its …

rule and targets a zero inflation rate, there is a significant increase in the variability of output but not inflation …

inflation and interest rates. We study a stylized New Keynesian model where the policy instrument is subject to a lower bound to … interest rates and inflation to study whether the decrease in the natural rate of interest leads to forecast densities … bound has a sizable effect on the distribution of future interest rates, its impact on forecast densities for inflation is …

This paper analyzes the effects of the lower bound for interest rates on the distributions of inflation and interest … and inflation to study whether the decrease in the natural real rate of interest leads to forecast densities consistent … a sizable effect on the distribution of future interest rates, its impact on forecast densities for inflation is …