This paper studies the welfare consequences of exogenous variations in trend inflation in a New Keynesian economy. Consumption and leisure respond asymmetrically to a rise and a decline in trend inflation. As a result, an increase in the variance of shocks to the trend inflation process...

Previous literature shows that in the presence of staggered price setting, high trend inflation induces not only a large loss in steady-state output relative to its natural rate but also indeterminacy of equilibrium under the Taylor rule. This paper examines the implications of a "smoothed-off"...

We propose a framework for consistently evaluating core inflation measures via a straightforward application of sound statistical inference principles. Under this framework, inflation measures (both headline and core) are regarded as estimators tracking the economy's true, unobserved inflation...

Micro evidence indicates that each period a fraction of prices is kept unchanged under a positive trend inflation rate. In a sticky price model based on this evidence, recent research shows that high trend inflation is a serious cause for indeterminacy of rational expectations equilibrium under...

This comprehensive study delves into the Harmonised Consumer Price Index (HCPI) behavior across European economies from the early 2000s to the post-pandemic period. By analyzing the patterns of convergence and divergence in HCPI persistence, the study aims to uncover the common external and...

The purpose of this paper is to measure inflation persistence in the following countries of Central and Southeastern Europe: Slovakia, the Czech Republic, Poland, Hungary, Romania and Serbia. The study sample covers monthly data from January, 1995 to May, 2010 for Poland, Hungary and Slovakia,...

This article presents a summary of the main results produced by the Inflation Persistence Network (IPN), a network of researchers from the twelve national central banks of the euro area, the ECB and the universities, which aimed to conduct a joint analysis of Inflation persistence and pricing...

For many years, a prevalent stylized fact in the literature on inflation dynamics has been that inflation is a highly persistent process, sometimes close to a random walk. This feature of the inflation process has several important implications for monetary policy modeling and conducting. From...

This paper employs the recently developed structural stability tests with unknown break point and two median unbiased estimation methods to model China inflation persistence over the most recent quarter of a century. Our empirical results suggest that the persistence of both consumer price...