The Global Financial Crisis opened a heated debate on whether inflation target regimes must be relaxed and allow for …

inflation and loose monetary policy in core economies – a time characterised by near zero interest rates and large asset … the contradictory and problematic nature of the direction monetary policy has taken in reaction to higher inflation. It … also to simultaneously fight inflation. …

consistent with these empirical properties, optimal policy in general delivers a positive inflation rate in the long run. Two … to zero, the long-run inflation rate coincides with the inflation bias under optimal discretion; for non-zero low …-frequency drift in beliefs, as households become highly patient valuing utility in any period equally, the optimal long-run inflation …