, prompting them to raise markups and prices in anticipation of potentially higher future inflation. These findings establish a … connection between heightened uncertainty, higher core inflation, and increased profits. …

period. The workers' bargaining power in the hours negotiation affects both unemployment volatility and inflation persistence … cost determination. This set-up produces realistic labor market statistics together with inflation persistence …

the central bank is to stabilize inflation. On the other hand, if the shift arises from an increase in the elasticity of … employment matches with respect to vacancies, then the policy maker faces a trade off between stabilizing inflation and … Taylor rule that targets inflation and output growth, the optimal monetary policy is more aggressive in pursuit of its …

Real wage rigidity is known to create a substantial trade-off between inflation and employment stabilization for …, monetary policy with a single focus on inflation stabilization is close to optimal. The reason is twofold: Firms cushion the …

stabilization policy is pronounced. The wealth rich or retired tend to favor inflation targeting. The wealth-poor working class …, instead, favors unemployment-centric policy. One- and two-agent alternatives can show unanimous disapproval of inflation …-centric policy, instead. We highlight how the political support for inflation-centric policy depends on wage setting, the tax system …

inflation persistence. The closer to zero this parameter, (i) the more firms tend to adjust on the intensive margin, reducing … wage in determining the marginal cost. This set-up produces realistic labour market figures together with inflation …

inflation targeting. For each rule we distinguish between cases with zero weight on the unemployment gap and a negative response … inflation. Responding to unemployment reduces cross-country differences within the monetary union and the differences in …