A number of central banks in advanced countries use ranges, or bands, around their inflation target to formulate their … tolerance range policies, characterized by a stronger reaction of the central bank to inflation when inflation lies outside the … unfavorable: a very strong reaction, when inflation is far from the target, is required to compensate for a moderately lower …

Keynesian assumption ofprice rigidity and show that the response of inflation to the output gap tends to be significant only if … the inflation rate tends to be relatively high and exceeds a certain threshold. For a low inflation rate, the price … during which the elasticity of inflation rate to an excess demand has become highly important and the inflation rate …

Is the observed correlation between current and lagged inflation a function of backward-looking inflation expectations …, or do the lags in inflation regressions merely proxy for rational forward-looking expectations, as in the new … "hybrid" specifications for inflation that allow for effects of lagged and future inflation. We show that these tests of …

capture inflation dynamics. These models are seen as providing an empirically reasonable characterization of observed … inflation behavior once suitable measures of the output gap are chosen; and, moreover, are perceived to be robust to the Lucas … critique in a way that earlier econometric models of inflation are not. We review the principal conclusions of this literature …

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 …

strategic complementarities, is only defined for annualised trend inflation rates of under 5.5%. This critical inflation rate is … below the average inflation rate over recent decades. Furthermore, over the range for which the optimal price is defined …, the slope of the New Keynesian Phillips curve generated by this model is decreasing in trend inflation. That contradicts …

output and inflation, as observed in a vectorautoregression analysis. In contrast to backward indexation to past inflation …, which is often assumed in the literature, sticky information leads to a hump-shaped response in the inflation of flexibly …

We analyse the incidence of endogenous entry and firm TFP-heterogeneity on the response of aggregate inflation to … distribution of firms in Spain. We then compare the inflation response to technology, interest rate and entry cost shocks, among … others. We find that structures in which large (more productive) firms predominate tend to deliver more muted inflation …