alternates between periods of deflation coupled with low output and periods of high economic activity with excessive inflation …. More generally, initial beliefs that are arbitrarily close to the inflation target equilibrium can result in complex … helps stabilize expectations around the inflation target equilibrium. -- Monetary policy ; nonlinear dynamics ; learning …

) the estimated policy rule becomes more inertial and less aggressive towards inflation; (ii) the ECB is confronted with a … more severe trade-off in the stabilization of inflation and the output gap …

following a convex fashion, combining the latter with an inflation targeting objective could be beneficial …

Inflation targeting is strictly suboptimal when economic actors have incomplete information about the state of the … ask what monetary policy rule is optimal. In contrast to sticky price or sticky information models, inflation and price …

government can also use an inflation contract, an employment target, an inflation target, or any combination of these to control … the central banker. The key feature of our model is a stochastic inflation bias, arising when wage setters receive some … state-contingent delegation is not possible and the stochastic inflation bias cannot be eliminated by optimal choice of the …