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We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on the likelihood of equilibrium determinacy to be both...
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interest rates. However, a central bank aiming at price stability will only do so when the announcement of a policy of …. Second, the statute of the ECB does not allow a binding commitment by the central bank. This does not mean, however, that the …
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