significantly inflation volatility in Poland. I derive this result from an estimated DSGE model of a small open economy. GDP … inflation volatility has not been affected by the presence of the term premium. At the same time, the term premium shock had … only a minor impact on GDP and inflation volatilities which suggests that the QE programs conducted by the major central …

policy rate will become constrained in the future lowers today's inflation by creating tail risk in future inflation and thus … reducing expected inflation. In an empirically rich model calibrated to match key features of the U.S. economy, we find that … the tail risk induced by the ELB causes inflation to undershoot the target rate of 2 percent by as much as 45 basis points …