The notion that flexible exchange rates insulate a country from foreign shocks is well grounded in theory, from the … to headline consumer price inflation. However, it remains puzzling that policy makers are ready to forego stabilization …

policy of flexible inflation targeting. A number of simple (but non-optimal) targeting rules are compared. Strict producer … Geldpolitik in einem 2-Länder-Modell mit träger Preisanpassung. Neben einem Cost-Push-Schock erlebt jedes Land auch … Zentralbanken verwirklicht werden kann, die eine Strategie des flexiblen Inflation Targeting verfolgen. Eine Reihe einfacher (aber …

findings in favor of the fiscal theory of price level as opposed to the traditional monetarist doctrine. …

inflation targeting policy of setting union-wide inflation to zero is never optimal. Second, the interactions lead to a trade … inefficiencies by mitigating the drop in output and inflation and the rise in relative consumption and prices. Such a policy response …

.The cost channel makes monetary policy less effective in combatting inflation, but it is shown that the optimal response to the …

optimal. This is because inflation makes saving for retirement less attractive, such that young agents optimally choose to … increase their consumption at the expense of lower savings. On the other hand, old agents consume less due to the inflation tax …. We show that for low inflation rates, the former effect dominates the latter, such that the Friedman rule is not optimal …