This paper analyses the effects of commodity price shocks in a new Keynesian model. The focus is on the central bank's choice of inflation target and the degree of real wage rigidity. It turns out that using core inflation rather than headline inflation is the superior strategy. Targeting...

Die Autoren analysieren wie sich unterschiedliche Inflationsziele und Reallohnrigiditäten auf die Transmission von Rohstoffpreisschocks auswirken. Es zeigt sich, dass eine geldpolitische Strategie mit einem Kerninflationsziel einer Strategie, die das Inflationsziel an der Gesamtinflationsrate...

The ECB's expansionary monetary policy has positive effects on the euro area economy. Interest rates have declined further, bank lending is improving, and the euro is weaker. However, inflation remains much too low and aggregate demand too weak for the output gap to close rapidly. Further...