In this paper we present two examples where the presence of inflation persistence could influence the qualitative nature of monetary policy. In the first case the desirability of a monetary policy regime comes under question when extensive inflation persistence exists. In the second case the...

The purpose of this paper is to provide a simple model which illuminates the interdependence between primary commodity prices and the rest of the economy. We study the role of commodity prices in a disinflation program, the role of commodity prices in determining whether or not a fiscal...