Inflation targeting has become the monetary policy framework of the nineties. At the other extreme, several central banks have recently adopted key elements of the inflation targeter's toolkit, but at the same time they have made formal declarations that they are not inflation targeters. Such a...

Summary This paper analyzes whether the short-run behavior of output, the interest rate, and the price level in the U.S., Germany, France, the U.K., and Italy follows the qualitative predictions of the IS-LM model augmented by a long-run aggregate supply schedule. The use of the structural...

This paper provides a monetary game model in which the short-run Phillips curve depends on the average inflation rate. Three main results are obtained: First, discretionary monetary policy not only leads to an inflation bias but also to an output stabilization bias. Second, a more independent...