inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions. Although an … inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy …

exchange rates vs. inflation targeting vs. price level targeting?'. We then build a simple macroeconomic model of a small open … economy. The model incorporates an 'outside lag' in the effect of monetary policy on aggregate demand, so that inflation … different monetary rules: a fixed exchange rate, a fixed inflation target, and a fixed price level target. We show that price …

Modern monetary theory (MMT) has grown in popularity in recent years. Several central bankers have made passing …

stabilizing inflation, whereas under no debt concerns, monetary policy is very effective in stabilizing the macroeconomy. …

to a policy in the future. Under commitment, optimal policy calls for letting debt follow a stationary process and take …

inflation in order to stabilize the expectations of households, firms and innovators. Endogenous growth provides a self … debt-stabilizing inflation when current fiscal deficits are not backed by future fiscal surpluses. Because growth creates … unique stable equilibrium, provided that the policy permits r−g to fall with inflation. …