-specific output gaps and inflation rates, we find that performance of the optimal policy rule can be closely approximated by a very … simple rule that targets a weighted average of aggregate wage and price inflation rates. In contrast, some commonly …-prescribed policy rules (such as strict price inflation targeting and Taylor's rule) perform very poorly in terms of social welfare …

the monetary policy rule while the true output gap influences aggregate demand and inflation. I investigate the … produce a hump-shaped pattern in trend inflation that peaks around 1979 and a downward movement in trend inflation since 1995 …. Under a nominal income growth rule, these low-frequency movements in inflation are substantially reduced but not eliminated …

pertinent institutions in early work on political business cycles, and then proceeds to a discussion of the inflation … inflation policy targets. The last section addresses current developments. These include the proper choice of monetary policy …

Since the early 1980s, the United States economy has changed in some important ways: Inflation now rises considerably … less when unemployment falls and the volatility of output and inflation have fallen sharply. This paper examines whether … volatility of monetary policy reaction functions can account for most or all of the change in the inflation …

A vast literature has documented how US inflation persistence has fallen in recent decades, but this finding is … difficult to explain in monetary models. Using survey data on inflation expectations, I document a positive co-movement between … that inflation is more persistent in periods of greater forecast sluggishness. My results suggest that changes in firm …

found to help rationalizing the hump-shaped response of inflation, without resorting to the counterfactual assumption of …

study the transmission mechanism. With matching frictions, wage rigidities have limited effect on inflation dynamics … opposite ways leaving marginal costs and inflation virtually unaffected …