Assigning a discretionary central bank a mandate to stabilize an average inflation rate—rather than a period …-by-period inflation rate—increases welfare in a New Keynesian model with an occasionally binding lower bound on nominal interest rates … inflation targeting (AIT) is equivalent to price level targeting (PLT). However, AIT with a finite, but sufficiently long …

Under inflation targeting inflation exhibits negative serial correlation in the United Kingdom, and little or no …, inflation appears to be (nearly) purely forward-looking, so that no mechanism introducing backward-looking components is … necessary to fit the data. These results question the notion that the intrinsic inflation persistence found in post-WWII U …

Following Fuhrer and Moore (1995), several authors have proposed alternative mechanisms to 'hardwire' inflation … European Monetary Union, of inflation-targeting countries, and of the new Swiss monetary policy regime, I show that, in the …), the parameters encoding the 'intrinsic' component of inflation persistence are not invariant across monetary policy …

: lagged expectations about monetary policy influence the current inflation rate through an indexation rule. No structural … inflation persistence is assumed. We show that this model can capture stylized facts about short-run inflation dynamics both in … between the degree of inflation persistence and the stability and transparency of monetary policy. Thereby, our model can …

In this paper we report results on inflation persistence using 79 inflation series covering the EU countries, the euro … area and the US for five different inflation variables. The picture that emerges is one of moderate inflation persistence … across the board. In particular we find euro area inflation persistence to be broadly in line with US inflation persistence …

policy rules and of the optimal unconstrained rule under commitment. The study reaches two main conclusions. First, inflation …

. Our analysis improves upon existing work by endogenising the volatility of both output and inflation. Improved …

Inflation targeting is implemented in different ways – most often by adopting point targets, by having tolerance bands … target types affect the anchoring of inflation expectations at shorter horizons differently. It tests two contradictory …. This suggests that there are some benefits to adopting intervals, but the central bank can anchor inflation expectations …

We show that the announcement of the ECB’s Strategy Review and the revision of its inflation target in summer 2021 went … persistent credibility gains, even after inflation increased …