inflation risk. We calculate the term structure of inflation uncertainty in New Keynesian models when the monetary authority … achieves equilibria with substantially lower long-run inflation risk. With either sticky prices or sticky wages, a price path … target reduces the variance of inflation by an order of magnitude more than it increases the variability of the output gap …

.S. inflation. The existing model succeeds at fitting inflation to optimal policy, but fails to link inflation to the economic trade …. Consequently, now there is an explanation for the rise and fall in inflation: the concurrent rise and fall in the perceived Philips …