the last decade. Using stylised models of the economies of the US, Euro area, UK and Japan, we argue that economic … stability has been fostered by improved monetary policy and by associated changes in the behaviour of inflation, which has …

model in which endogenous regime switches are triggered by the inflation rate. The model separates a high from a low … inflation regime with both regimes being strongly persistent. Generalized impulse response functions highlight important across …-regime differences in the responses of the economy to monetary policy and inflation shocks. Simulating both regimes with individual …