The paper presents the welfare cost of inflation in a banking time economy that models exchange credit through a bank … welfare cost of a 10% inflation rate instead of zero, for comparison to other estimates, as well as the cost of a 2% inflation … rate instead of a zero inflation rate. The zero rate is specified as the US inflation rate target in the 1978 Employment …

aggregate demand gains momentum. If inflation also has inertia, the central bank still overheats the economy during the low …

by the announcement of inflation targeting in 1991 when estimating the effects of monetary policy. For instance, we find … that a 100-basis-point increase in our new shock series leads to a 1.0 per cent decrease in real GDP and a 0.4 per cent … fall in the price level, while not accounting for the break leads to a permanent decrease in real GDP and a price puzzle …

a nominal GDP target, which automatically divides an adverse supply shock equally between impacts on inflation and real …It has been proposed that central banks should target Nominal GDP (NGDP),as an alternative to targeting the money … supply, exchange rate,or inflation. But the proposal appears in the context of the largest advanced economies. In fact NGDP …