In monetary policy strategies geared towards maintaining price stability conditional and unconditional forecasts of inflation and output play an important role. In this paper we illustrate how modern sticky-price dynamic stochastic general equilibrium (DSGE) models, estimated using Bayesian...

This paper develops and estimates a dynamic stochastic general equilibrium (DSGE) model with sticky prices and wages for the euro area. The model incorporates various other features such as habit formation, costs of adjustment in capital accumulation and variable capacity utilisation. It is...

This paper investigates the relationship between the Great Moderation and two measures of inflation performance: trend inflation and inflation volatility. Using annual data from 1970 to 2011 for a large panel of 180 developed and developing economies, the results show that, as expected, both...