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 … counterfactual exercises suggest that the change in the Federal Reserve's policy response to inflation is likely to have been the …

This paper presents a model whose key feature is the existence of wage indexation clauses to lagged inflation. The main … important past inflation will be when explaining current inflation movements. However, a plausible (small) degree of indexation … does not explain observed US inflation autocorrelations. Besides, optimal monetary policy is computed and the optimal …