combine an inflation target, Fisher equation, policy reaction function and short and long run aggregate supply analysis to … shock to demand, a negative supply shock and dislodged inflation expectations. We also illustrate the problems of a zero …

inflation while declaring monetary aggregates largely irrelevant. Critics, however, have argued that these models need to be … modified to account for observed money growth and inflation trends, and that monetary trends may serve as a useful cross … persistent errors in monetary policy and sustained trends in money growth and inflation. If interest rate prescriptions derived …