This paper considers a simple quantitative model of output, interest rate and inflation determination in the United … disturbances, can account for our data nearly as well as an unrestricted VAR. The monetary policy rule that most reduces inflation … high average inflation rate. But even in the case of a constrained-optimal policy, that takes into account some of the …

This paper considers a simple quantitative model of output, interest rate and inflation determination in the United … disturbances, can account for our data nearly as well as an unrestricted VAR. The monetary policy rule that most reduces inflation … high average inflation rate. But even in the case of a constrained-optimal policy, that takes into account some of the …

A prolonged period of extremely low nominal interest rates has not resulted in high inflation. This has led to … inflation to be lower. The fact that standard models of the effects of monetary policy have the property that perfect foresight … equilibria in which the nominal interest rate remains low forever necessarily involve low inflation (at least eventually) might …

central banks to control inflation within their borders, at least in the absence of coordination of policy with other central … the ability of monetary policy to control inflation: by making liquidity premia a function of 'global liquidity' rather … to control the dynamics of inflation. …

policy. First, I consider whether ignoring money means returning to the conceptual framework that allowed the high inflation … of the 1970s. Second, I consider whether models of inflation determination with no role for money are incomplete, or … evidence for a long-run relationship between money growth and inflation. (Here I give particular attention to the implications …

function that penalizes inflation variations, deviations of output from potential, and interest-rate variability. Sluggish …