We empirically characterize episodes of large inflation surges that have been observed worldwide in the last three … decades. We document four facts. (1) Inflation following surges tends to be persistent, with the duration of disinflation … exceeding that of the initial inflation increase. (2) Surges are initially unexpected but followed by a gradual catch-up of …

This paper provides some empirical estimates on how tightly is it feasible to control inflation in a very small open … inflation and output variability that are achievable under a range of alternative monetary policy rules. These frontiers … illustrate that inflation stabilization is more challenging in Iceland than in other industrial countries primarily because of …

This paper reconsiders the link between tight money policies and inflation in the spirit of Sargent and Wallace's (1981 … return-dominated currency is used to study the long-run effects on inflation of a tightening of monetary policy engineered … arithmetic can be stable. In contrast, when monetary policy is conducted via an inflation target rule, the only stable …

authority-a scenario increasingly relevant for many developed economies today. Central bank control over the long-run inflation …

authority-a scenario increasingly relevant for many developed economies today. Central bank control over the long-run inflation …

policy response to the shock, aggravating the fall in domestic demand. During the 2008-09 crisis, a full-fledged inflation …

support for the model. The velocity of money tracks productivity growth at about 2% over the period. Setting the inflation … target rate equal to the growth rate of velocity leads to an inflation rate near 2% and is akin to pursing a Friedman (1960 …

The theoretical foundation of inflation targeting was laid out by the Swedish economist Knut Wicksell (1851-1926) in … as the rule for monetary policy. Today, inflation targeting is considered the best-practice approach to monetary policy … across the world. It has contributed to stable and low consumer price inflation since the 1990s in many countries. However …

inflation targeting is challenging as the country is going through a period of deep structural reforms. Therefore, the Central …