inflation target. In contrast, I show that the standard New Keynesian monetary model predicts that nominal interest rates should …

stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …

generate substantial inflation. Such a shock induces an equilibrium decline in the relative price of services. If price … increase in goods prices, resulting in, on net, little inflation. If prices in the services sector are downwardly rigid …, however, this takes place mostly through an increase in goods prices, resulting in inflation. To illustrate the relevance of …

aggregate demand still can cause significant inflation. …

, prompting them to raise markups and prices in anticipation of potentially higher future inflation. These findings establish a … connection between heightened uncertainty, higher core inflation, and increased profits. …