shocks and UIP shocks, stabilizing exchange rate in addition to standard inflation targeting can be welfare-improving. Thus …

a unified framework that incorpo- rates regime switching both in shock variances and in the inflation target. We propose … the inflation target are not the main driving force of high inflation in the 1970s. The model that best fits the U.S. time …-series data is the one with synchronized shifts in shock variances across two regimes, and the fit does not rely on strong nominal …

In expectations-driven liquidity traps, a higher inflation target is associated with lower inflation and consumption … optimal inflation target. Using a calibrated New Keynesian model with an effective lower bound (ELB) constraint on nominal … optimal inflation target nontrivially. Our analysis provides a reason to be cautious about the argument that central banks …