derived. The reason is that inflation, output and the interest rate are convex functions of each member's idiosyncratic degree … of model uncertainty. If the degree of model uncertainty becomes more heterogenous, inflation volatility falls due to … identical to those derived from a Bayesian approach. -- Robustness ; Model Uncertainty ; Monetary Policy Committee ; Optimal …

derived. The reason is that inflation, output and the interest rate are convex functions of each member’s idiosyncratic degree … of model uncertainty. If the degree of model uncertainty becomes more heterogenous, inflation volatility falls due to …

for robustness leads to a more aggressive policy. Increasing the weight attached to interest rate smoothing raises the … degree of aggressiveness. Our results indicate that a preference for robustness crucially depends on the way different types …

-run inflation rate is positive and between 0.5% and 1.5% per year. A positive long-run inflation rate helps the fast-growing new … without learning-by-doing in new firms predicts an optimal long-run inflation rate near zero. In a two-sector model with …

area (EA) and the US. The estimations show that until mid-2014 the ECB's response to inflation was more forceful when … inflation was above 2% than below 2%. Since then, the ECB's policy can be characterised as symmetric, and we quantify the … bound and a low neutral real rate, and find that it prescribes a stronger response to inflation and the output gap when …

model provides micro-foundations for a nonlinear Phillips curve: the sensitivity of inflation to activity increases after … large shocks due to an endogenous rise in the frequency of price changes, as observed during the recent inflation surge. In … response to large cost-push shocks, optimal policy leverages the lower sacrifice ratio to reduce inflation and stabilize the …