We develop a theoretical model that features a business cycle-dependent relation between out- put, price inflation and … inflation expectations, augmenting the model by Svensson (1997) with a nonlinear Phillips curve that reflects the rationale … pronounced convex relationship between inflation and the output gap, meaning that the coefficient in the Phillips curve on the …

Inflation was due, to a dominant extent, to large demand non-policy shocks, and to a lesser extent - especially in 1973 and 1979 …We use a Bayesian time-varying parameters structural VAR with stochastic volatility for GDP deflator inflation, real … Moderation in the United Kingdom. Our evidence points towards a dominant role played by shocks in fostering the more stable …

-regime differences in the responses of the economy to monetary policy and inflation shocks. Simulating both regimes with individual … 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 …