gap coefficient is higher in the recessionary regime than in the normal one. The estimate of the inflation coefficient …

In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present … a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation … inflation exceeded the target in the past. Moreover, the central bank responds non-linearly to past inflation gaps. This is …

linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … properties of interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity …

This paper examines the properties of interest rate rules aimed at controlling aggregate price inflation. Policies are … compared in two models having either flexible or sticky inflation The latter is assumed to derive from a traditional, adaptive …-expectations augmented Phillips curve. The flexible inflation model derives from the modem view, due to Gray (1976) and Fischer (1977), that …

This paper investigates the macroeconomic risks associated with undesirably low inflation using a medium-sized New … Keynesian model. We consider different causes of persistently low inflation, including a downward shift in long-run inflation … persistently low inflation depend crucially on its underlying cause, as well as on the extent to which monetary policy is …

marked by a shift to a high-inflation regime in the early 1970s, which ended with Volcker's stabilization policy at the … know the policy regime, the fall of inflation and interest rates in the disinflation episode in the early 1980s is better …

shortfalls in inflation and output relative to exogenous trends, and the policy rate is kept at the ELB until the joint shortfall … is made up. Bernanke's second proposal adds only the cumulative inflation shortfall since the beginning of an ELB episode … directly to an otherwise standard Taylor rule. This cumulative shortfall in inflation from the 2 percent objective can be …

monetary policy. We simulate several interest-rate setting policy rules with either high or low inflation targets. We determine … negative spending shocks. For small temporary and large permanent shocks, the output path with zero inflation lies modestly … below that for higher inflation. For large shocks persisting a few quarters, differences in output paths across high- and …