In the monetary policy literature it is commonly assumed that trend inflation is zero, despite overwhelming evidence that zero inflation is neither empirically relevant nor a practical objective for central bank policy. We therefore extend the standard New Keynesian model to allow for positive...

In the case of the consumer price index the importance of a seasonally adjusted measure lies in the possibility of promptly identifying turning points in inflation. The focus of this paper is the so-called "cost-of-living" index, the most used measure of Italian inflation. Our aim is to identify...

In this paper, we characterize conditions under which interest rate feedback rules wherby the nominal interest rate is set as an increasing function of the inflation rate generate multiple equilibria. We show that these conditions depend not only on the fiscal regime (as emphasized in the fiscal...