policy shocks on aggregate consumption and for the impact on inflation that other models have hard a time explaining. In … particular, the model can account both for the price puzzle and for inflation persistence. We also show that the deep habits …

as an increasing function of the inflation rate induce aggregate instability by generating multiple equilibria. We show …

linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … properties of interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity. …

employment in peripheral Europe could be restored by raising the Euro-area annual rate of inflation to about 4 percent for the …

is, rules that respond to increases in inflation with a more than one-for-one increase in the nominal interest rate, are … which the nominal interest rate is near zero and inflation is possibly negative. …

Observed inflation targets around the industrial world are concentrated at two percent per year. This paper … investigates the extent to which the observed magnitudes of inflation targets are consistent with the optimal rate of inflation … of inflation ranges from minus the real rate of interest to numbers insignificantly above zero. Furthermore, we argue …

-bound, that is, by threatening to set the nominal interest rate at a negative value should the inflation rate fall below a certain … intended equilibrium and leading to low (possibly zero) interest rates and low (and possibly negative) rates of inflation …