In order to explain the joint fluctuations of output, inflation and the labor market, this paper first develops a … general equilibrium model that integrates a theory of equilibrium unemployment into a monetary model with nominal price … helps to explain the sluggishness of inflation and the persistence of output after a monetary policy shock. The ability of …

principal components estimator, suited to estimate systems of fractionally cointegrated processes. The proposed core inflation … measure is the scaled common persistent factor in inflation and excess nominal money growth and bears the interpretation of … monetary inflation. The proposed measure is characterised by all the properties that an u0093idealu0094 core inflation process …

This paper investigates the link between the perceived inflation risks in macroeconomic forecasts and the inflation … risk premia embodied in financial instruments. We first provide some stylized facts about the term structure of inflation … compensation, inflation expectations and inflation risk premia in the euro area bond market. Latent factor models like ours fit …