below the ECB’s inflation target. Therefore, a readjustment of the infl ation target seems unjustified. Furthermore, as the … ECB can expect inflation to return to its target, it possibly can accelerate tapering its unconventional monetary policy …

, and time-varying trend inflation using post-WWII U.S. data. The model embedding the stochastic target performs better in … policy aggressiveness and inflation gap persistence. …

In this paper, we show that low trend inflation strongly affects the dynamics of a standard Neo-keynesian model where … monetary policy is described by a standard Taylor rule. In particular, we show that trend inflation: (i) enlarges the … average inflation in both theoretical and empirical analysis. -- Sticky Prices ; Taylor Rules and Trend Inflation …

We show that low trend inflation strongly affects the dynamics of a standard Neo-Keynesian model where monetary policy … is described by a standard Taylor rule. Moreover, trend inflation enlarges the indeterminacy region in the parameter … cannot disregard average inflation in both theoretical and empirical analysis. …