This paper examines the performance of inflation forecast feedback rules in a two-sector, calibrated model of the U ….K. economy. Under such rules, the interest rate responds to the deviation of the unchanged-interest-rate forecast of inflation … from the inflation target. We find that this procedure may produce a high degree of nominal and real stability, even …

We examine the indicator property of the monetary indicator for inflation. Using a P*-model, Svensson shows …