a rationale for the practice of inflation zone targeting. We show that the presence of either zone-quadratic preferences … or a zone-linear relationship between inflation and economic activity provides strong incentives to deviate from … structure and relative preference towards economic stability in determining the width of the implied targeted inflation zone …

Central banks in most advanced economies have reacted similarly to the increase in inflation that started in 2021. They … initially looked through the rising inflation by leaving monetary policy relatively unchanged. Then, after inflation continued … aiming to anchor drifting inflation expectations. Why might central banks want to look through supply-driven inflation …

for the exchange rate pass-through and for the volatility of shocks to inflation. Under the so-called “normal” regime, the … long-run pass-through to consumer prices inflation is estimated at near zero value, only 0.00057 percentage point given a 1 … inflation, for the same exchange rate shock. The Markov-switching (MS) model outperforms the fixed parameters model according to …

This paper analyzes the dramatic rise in U.S. inflation since 2020, which we decompose into a rise in core inflation as … measured by the weighted median inflation rate and deviations of headline inflation from core. We explain the rise in core with …-through into core from past shocks to headline inflation. The headline shocks themselves are explained largely by increases in …

This paper explores communication strategies for anchoring households’ medium-term inflation expectations in a high … inflation environment. We conducted a survey experiment with a representative sample of 4,000 German households at the height of … the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB …

This paper explores communication strategies for anchoring households' mediumterm inflation expectations in a high … inflation environment. We conducted a survey experiment with a representative sample of 4,000 German households at the height of … the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB …

We build a novel term structure model for pricing synthetic euro area core inflation-linked swaps, a hypothetical swap … contract indexed to core inflation. Our approach relies on a term structure model of traded headline inflation-linked swap … rates, which we assume span core inflation. The model provides estimates of market-based expectations for core inflation, as …

Price-setting Microdata Analysis Network (PRISMA) for the level of inflation that central banks should target. The micro … significantly positive inflation rate in France, Germany and Italy: the steady-state inflation rate, jointly maximising welfare in … up optimal inflation targets further. The welfare costs of targeting an inflation rate of zero, as suggested by monetary …