A popular argument in favour of price stability is that the inflation-tax burden would disproportionately fall on the … interest bearing assets (LAMP). We show that a combination of higher inflation and lower income taxes reduces inequality. When … we calibrate the share of constrained agents to fit the wealth Gini index for the US, the optimal inflation rate is above …

How and under what circumstances can adjusting the inflation target serve as a stabilization-policy tool and contribute …-push type shocks which create a trade-off between inflation and output gap stabilization. We show that this trade-off leads to a … additional policy tool of an inflation target rule and find that the optimal target needs to be adjusted in a persistent manner …

How and under what circumstances can adjusting the inflation target serve as a stabilization-policy tool and contribute …-push type shocks. Our proposed inflation target rule calls for the target to be adjusted in a persistent manner and in the … opposite direction to the realization of a cost-push shock, which is essentially a makeup strategy. The inflation target rule …

Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic … growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the … reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they …

This paper studies monetary policy rules in a small open economy with Inflation Targeting, incomplete pass-through and …

This paper aims at assessing the impact of inflation targeting on actual inflation when considering inflation … perceptions together with interrelated inflation expectations, modifying the seminal papers of Barro and Gordon (1983a and 1983b …). The modeling of inflation perceptions and of inflation expectations follows suggestions of recent literature, but also …

rate both matter for determining inflation and economic activity. …

responds to inflation and output volatility, especially during economic crises. This framework offers a promising alternative …