helps explain the well known puzzle that fundamental variables such as relative money supplies, outputs, inflation and …

inflation targeting and aggressive use of forward guidance. In contrast to the predictions of conventional macroeconomic theory … inflation, which is consistent with the evidence. As Kuroda (2016) emphasizes, for an economy without a history of inflation … being anchored by a target, individuals need direct evidence that the central bank is capable of moving inflation to target …

approximately 80 percent. If the Federal Reserve had followed Average Inflation Targeting - which can arguably approximate the new …

Should central banks, because of the zero-lower-bound problem, raise their inflation-rate targets? Several arguments … are relevant. (1) In the absence of the ZLB, the optimal steady-state inflation rate, according to standard New Keynesian … equation would, however, imply that the weight on the second of these values should be zero. (3) There may be some scope for …

stable inflation behavior will be generated -- is incorrect. This is because New Keynesian (NK) models are typically … consistent with the existence of RE paths with explosive inflation rates (in addition to one or more stable paths) that normally … imply the absence of explosive inflation. That result does not, however, justify negative conclusions about NK analysis. For …

negative correlation between consumption and inflation from 1971 to 2000 and the positive one after 2000, and (3) the … stylized facts: (1) the positive stock-bond return correlation from 1971 to 2000 and the negative one after 2000, (2) the … coexistence of positive bond risk premiums and the negative stock-bond return correlation. We show that two distinctive shocks …

approach gradually a new steady state with positive average inflation. Around that steady state, the optimal policy implies … well defined (second-best) paths for inflation and output in response to shocks to the natural rate. Under plausible …

This paper investigates the hypothesis that surprise changes in the money supply and anticipated inflation (the Mundell … surprises and expected real interest or an inverse relationship between anticipated inflation and expected real interest. These …

This paper investigates whether permanent monetary tightenings increase inflation in the short run. It estimates, using … increases in the nominal interest-rate lead, in accordance with conventional wisdom, to a decrease in inflation and output and … an immediate increase in inflation and output and a decline in real rates. Permanent monetary shocks explain more than 40 …