output-inflation volatility frontier of each model for alternative specifications of the interest rate rule, subject to an …-difference of the federal funds rate responds to the current output gap and the deviation of the one-year average inflation rate … complicated rules (i.e., rules that respond to a larger number of variables and/or additional lags of output and inflation …

avoids explosive debt and monetary policy controls inflation, irrespective of the relative strengths of each policy stance … inflation. Therefore, inflation and debt dynamics are determined jointly. To ensure stable macroeconomic conditions, both the …

monetary policy regime under uncertain inflation dynamics that alter the steady state properties of the underlying model as … well as the stochastic dependencies between model parameters and shocks. Since shifts in the inflation target are examples … persistence of inflation to the recent proposal of Blanchard et al. (2010) to raise the inflation target from its conventional …

relationship between uncertainty of inflation persistence and optimal monetary policy and discusses the consequences of the recent … Blanchard proposal to implement a higher inflation target in the light of parameter uncertainty. Furthermore, it provides …

relationship between uncertainty of inflation persistence and optimal monetary policy and discusses the consequences of the recent … Blanchard proposal to implement a higher inflation target in the light of parameter uncertainty. Furthermore, it provides …-orthogonal parameter uncertainty. -- inflation persistence ; parameter uncertainty ; inflation target ; dynamic programming …