The existence of nominal rigidities and inflation differentials between countries offers two of the main rationales for … an inflation buffer in a monetary union where monetary policy is oriented towards an area-wide inflation objective … strong argument for a positive inflation buffer to “grease the wheels” of the euro area economy – also in order to avoid the …

determinant of the monetary transmission mechanism, namely the degree of persistence characterising the inflation process. The … types of staggered contracts specifications which induce quite different degrees of inflation persistence. The paper shows … that inflation persistence is high when uncertainty about the prevailing degree of inflation persistence is pervasive …

The rise in inflation in 2021-22 sparked a growing literature and debate over the causes of the surge as well as the … near- and medium-term path for inflation. This review offers three key messages. First, the exceptional nature of shocks … resulting from the COVID-19 pandemic and geopolitical events drove the surge in inflation and the initial underestimation by …

What determines the stochastic path of inflation? We study this question in a monetary economy featuring imperfect … information and rational expectations. The central bank follows an inflation targeting rule and communicates noisy information … about the future state of the economy to market participants through its public forecasts of inflation and output. Agents …

alternative monetary policy strategies. We start with the relationship between output and inflation and investigate the fit of the … reject the nominal contracting model in favor of the relative contracting model which induces more inflation persistence, we … in countries which transitioned out of a high inflation regime such as France and Italy. We close the model by estimating …