central banks target inflation at a rate of about 2 percent. Many economists have recently proposed even higher inflation … importance of appropriately accounting for a low, positive trend inflation rate for the conduct of monetary policy. We first … review empirical research on the evolution and dynamics of U.S. trend inflation, as well as some proposed new measures to …

-run relationship between inflation and output is positive in the Rotemberg model and negative in the Calvo model. ii) The log … inflation enlarges the determinacy region in the Rotemberg model, while it shrinks the determinacy region in the Calvo model. iv …) The responses of output and inflation to a positive technology shock are amplified by trend inflation in Calvo, while they …