We examine the evolution of monetary policy rules in a group of inflation targeting countries (Australia, Canada, New … countries, although the importance of the exchange rate diminishes after the adoption of inflation targeting. Third, the … response of interest rates to inflation is particularly strong during periods when central bankers want to break a record of …

In this paper we systematically evaluate how central banks respond to inflation deviations from target. We present a … stylized New Keynesian model in which agents' inflation expectations are sensitive to inflation deviations from target. To (re …-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded …

inflation as one component of future real wages. This paper scrutinizes whether countries in CEE that officially announce an … inflation target are tempted to act time-inconsistently and switch from the announced inflation target to an exchange rate … target in order to sustain higher output via surprise inflation. If market participants discover the time-inconsistency, they …

indicator for future inflation, therefore being only instrumental (to stabilize inflation) rather than important per se. …

and disadvantages of the various output gap measures. First, I examine the usefulness of the output gap for inflation …

In a simple New Keynesian model, we derive a closed form solution for the inflation-gap persistence parameter as a … to inflation and the output gap, we show that the empirically observed changes in U.S. inflation-gap persistence during … Benati’s (2008) view that inflation persistence should not be considered a structural parameter in the sense of Lucas. …

either the inflation or the output gap varies in terms of magnitude and/or statistical significance across the high and low … inflation regimes in all countries. In particular, the exchange rate has an impact in the former but not in the latter regime …

either the inflation or the output gap varies in terms of magnitude and/or statistical significance across the high and low … inflation regimes in all countries. In particular, the exchange rate has an impact in the former but not in the latter regime …

fragility of leveraged firms in its pursuit of inflation-targeting interest rate policies. This paper develops a small …