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 …

This paper studies the challenge that increasing the inflation target poses to equilibrium determinacy in a medium …-sized New Keynesian model without indexation fitted to the Great Moderation era. For moderate targets of the inflation rate …