monetary policy literature. The extent to which these firms adjust their prices to lagged inflation has been taken as fixed. We … consider the implications of firms choosing the optimal degree of indexation so these simple pricing rules deliver prices as … close as possible to those which would be chosen optimally. We find that the degree of indexation depends on the extent of …

policy literature. The extent to which these firms adjust their prices to lagged inflation has been taken as fixed. We … consider the implications of firms choosing the optimal degree of indexation so these simple pricing rules deliver prices as … close as possible to those which would be chosen optimally. We find that the degree of indexation depends on the extent of …

model indexation regulates the sources of inflation persistence. When indexation is zero, the inflation gap is purely … forward- looking and inflation persistence depends only on the level of trend inflation, while full indexation makes the …We study the properties of the optimal nominal interest rate policy under different levels of price indexation. In our …

policy literature. The extent to which these firms adjust their prices to lagged inflation has been taken as fixed. We … consider the implications of firms choosing the optimal degree of indexation so these simple pricing rules deliver prices as … close as possible to those which would be chosen optimally. We find that the degree of indexation depends on the extent of …

episode price-setting firms' expect inflation to be highly persistent and opt for backward-looking indexation. As the central … that choose the rate for indexation also re-assess the likelihood that announced inflation targets determine steady …-state inflation and adjust indexation of contracts accordingly. A strategy of announcing and pursuing short-term targets for inflation …