bound (ZLB) on nominal interest rates has on the recommendations of such policy-makers. For a given target inflation rate … face in practice. We also examine the implications of the ZLB for policy-makers’ preferences as to their inflation target … neutral real interest rate is low. Such policy-makers should also set a higher target inflation rate if the economy’s natural …

information, the model is estimated on data for the United States and Australia using Bayesian methods. The empirical exercise … Australia is a relatively small and open economy. …

imply that both inflation and real variables must ‘jump’ in response to monetary policy (and other) shocks, in contrast to …

We estimate an open economy dynamic stochastic general equilibrium (DSGE) model of Australia with a number of shocks … important drivers of the Australian business cycle. We also find that the initial impact on inflation of an increase in demand … positive effect on inflation that dominates at longer horizons. …

In an open economy inflation-targeting framework, whether policy-makers should target aggregate or non-traded inflation … inflation process that the paper suggests have occurred over the past two decades: the effect of exchange rate changes on … inflation appears to have become more muted and the inflation process appears to have become better anchored. …

inflation. It identifies some of the characteristics shared by countries which have suffered falling output in the aftermath of …