Davig, Troy; Leeper, Eric; Walker, Todd B. - National Bureau of Economic Research (NBER) - 2010
a burst of inflation that devalues the existing nominal debt stock. The probability of this outcome places upward … pressure on inflation expectations and poses a substantial challenge to a central bank pursuing an inflation target. The … distribution of outcomes for the path of future inflation has a fat right tail, revealing that only a small set of outcomes imply …