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This paper extends the analysis of price-level targeting to a model including the New-Keynesian Phillips Curve. We examine the inflation-output variability tradeoffs implied by optimal inflation and price-level rules. In previous work with the Neoclassical Phillips Curve, we found that the...
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The following are comments in response to Lars Svensson's "Targeting versus Instrument Rules for Monetary Policy: What Is Wrong with McCallum and Nelson?"
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