inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an … inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy …

inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions. Although an … inflation target eliminates this inflation bias, it creates a conflict between monetary policy and discretionary fiscal policy …

This chapter examines the concept of inflation persistence in macroeconomic theory. It begins by defining persistence … persistence from the literature on imperfect information models, learning models, and so-called “trend inflation models …

. Raising the inflation target or appointing an inflation-conservative central banker mitigates the inflation shortfall away …

during FY2004/2005:Q1-FY2015/2016:Q4; and Bayesian methods are used in estimation. Findings - The results show that monetary … and fiscal policy instruments in Egypt contribute to economic stability through their effects on inflation, output and …, inflation and debt. Also, it would be neither possible to contrast the outcome of monetary and fiscal authorities commitment to …

optimise. Under discretionary monetary policy the size of the inflation bias depends on the fiscal policy regime. Using the … with the alternative fiscal policy rules, and inflation and output persistence reflects the economic data. With the deficit …

, increased inflation and output due to higher government spending during a recession speed up the return of the policy rate to …