In closed or open economy models with complete markets, targeting core inflation enables monetary policy to maximize … is high. We develop an open economy model with incomplete financial markets to show that headline inflation targeting … headline inflation, assigns zero weight to import prices. …

This paper computes the welfare gains from inflation reduction in an estimated dynamic stochastic general equilibrium … welfare gains from a 10 percentage points drop in inflation. Under some circumstances, the transitional losses can erase most …

) model to re-estimate the welfare costs of inflation. We first calibrate the model and show that it is capable of generating … model the scale parameters and the intensity of competition significantly affect the welfare cost of inflation. Specifically …

The effect of a permanent change of inflation on the distribution of wealth is analyzed in a general equilibrium OLG … of inflation results in a lower stock market participation rate; in addition, the distribution of wealth becomes more … anticipated inflation are considerably lower than in Imrohoroglu (1992). …

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 …

The effect of a permanent change of inflation on the distribution of wealth is analyzed in a general equilibrium OLG … of inflation results in a lower stock market participation rate; in addition, the distribution of wealth becomes more … anticipated inflation are considerably lower than in Imrohoroglu (1992) …

The inflation targeting policy, which is adopted in a lot of countries in recent years, has been introduced with a band … target in most countries. However, in the many theoretical analysis, the target of the inflation rate is assumed to be a … few. In this paper, to treat the above-problem, we make the inflation band targeting model which is based on Barro and …