inflation. Finally, the paper shows that even in the presence of a common productivity shock already small deviations of some of … central bank puts a higher weight on stabilizing inflation in the country with a higher degree of nominal rigidity continues …-country disparities in the degree of price rigidities on the volatility of inflation are amplified. While the volatility of inflation in …

effective in combating inflation, but it is shown that the optimal response to the decline in effectiveness is a stronger use of …: commitment outperforms the Taylor rule, the Taylor rule outperforms strict inflation targeting, and strict inflation targeting …