When taken to examine disinflation monetary policies, the current workhorse DSGE model of business cycle fluctuations … downturn, disinflation entails non-zero overall welfare gains. …

disinflation under inflation targeting policies. The analysis is motivated by the disinflation performance of many inflation …-targeting countries, in particular the gradual Chilean disinflation with temporary annual targets. At the start of the disinflation … adaptive learning lowers the cost of disinflation. This reduction can be exploited by a gradual approach to disinflation. Firms …

The real effects of an imperfectly credible disinflation depend critically on the extent of price rigidity. In this … paper, we examine how credibility affects the outcome of a disinflation in a model with endogenous time-dependent pricing … rules. Both the endogenous initial degree of price rigidity and changes in the duration of price spells during disinflation …