improves the inflation-output tradeoff for a discretionary central bank. However, in the aftermath of a deep recession with a … in inflation and output when the lower bound is binding …

. Quantitative goals take three forms: exchange rates, money growth rates, and inflation targets. We analyze the effects on inflation … determinants of inflation (such as fiscal policy, the business cycle, and openness to international trade), and the endogeneity of … systematically and robustly associated with lower inflation. The exact form of the monetary target matters somewhat (especially for …

deviate from the strict inflation targeting since the policy maker faces a typical unemployment/inflation trade-off. In this … context and unlike a standard New Keynesian model stabilizing inflation is not sufficient to stabilize the marginal cost … matches. Hence optimal monetary policy features unemployment targeting along with inflation targeting …

economic activity, inflation and government debt in face of an occasionally binding lower bound on the nominal interest rate in … policy, the optimal fiscal policy rule features a strong counter-cyclical response to the deviation of inflation from the … inflation significantly improves welfare and reduces the lower-bound frequency. In addition, the optimal simple monetary and …

creates a trade-off for discretionary central banks between inflation and output stabilization. As a consequence, inflation …

straightforward recipe for mitigating the welfare costs and the systematic inflation shortfall associated with expectations …-driven liquidity traps. Raising the inflation target or appointing an inflation-conservative central banker improves inflation outcomes …

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 …

Does an inflation conservative central bank agrave; la Rogoff (1985) remain desirable in a setting with endogenous … spending. The optimal inflation rate internalizing this distortion is positive, but lack of monetary commitment robustly … generates too much inflation. A conservative monetary authority thus remains desirable. Exclusive focus on inflation by the …

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