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, contrary to theoretical predictions, the one-round ahead (publicly known) shock is significant, but future inflation is not …. Our findings cast light on price dynamics when subjects have limited computational capacities. -- Inflation Persistence …
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Why do dynamic inconsistencies in monetary policy exist? In this paper we present a traditional model with output inefficiencies, but we allow for monetary policy to be influenced by the various constituencies in the economy, that pressure the Congress to in turn pressure the central bank to...
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