-run trade-offs between output and inflation: lower trend inflation flattens the Phillips curve and decreases steady-state output … by increasing markups. We show that the aggregator reduces both the steady-state welfare cost of higher trend inflation … and the inflation-related weight in a model-based welfare function for higher trend inflation. Consequently, optimal trend …

output and real-rate gaps can be represented in a parsimonious and practical manner using the theory of anelasticity that …

economies. The general findings for monetary policy are that, while it was costly to lower inflation (in terms of output and … inflation further from its already low level. While inflation was being lowered, in a number of cases central banks were also … evidence that these changes have helped in terms of better anchoring inflation expectations. At the same time there is no firm …

Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic … growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the … reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they …

discretion by calculating quadratic loss ratios, the (inflation plus unemployment) loss in high deviations periods divided by the … for the vast majority of rules, and (2) rules with larger coefficients on the inflation gap than on the output gap are … preferred to rules with larger coefficients on the output gap than on the inflation gap. These results are robust to policy lags …

transition to inflation targeting and prioritizing low inflation against the other goals of the monetary authorities …. -- macroeconomic stability ; budget rule ; commodity revenues management ; inflation targeting …

switches that either affect the inflation target or the response to inflation deviations from target lead to different … determinacy regions and different output, inflation, and interest rate distributions. With regime switching, the standard Taylor … determinacy. Switching inflation targets primarily affects the economy 's level, whereas switching inflation responses affects the …