In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting a target based on headline rather …

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfaremaximizing central bank should adopt flexible headline inflation targeting - a target based on headline …

This paper studies the nature, evolution, and sources of inflation heterogeneity across households in France and … Germany. Inflation differences are large and persistent. The two main sources of inflation heterogeneity are spatial …. Income heterogeneity by itself is not a relevant determinant of inflation heterogeneity, but due to its correlation with …

In a parsimonious regime switching model, expected consumption growth varies over time. Adding inflation as a … expected inflation. Embedded in a general equilibrium asset pricing model with learning, these dynamics replicate the observed …

We study redistributive effects of inflation across households with varying nominal wealth positions using a randomized … information experiment on clients of a large bank. On average, individuals are well informed about current levels of inflation and … are concerned about its impact on their wealth; yet, most individuals are not aware of how inflation erodes nominal asset …

We use inflation and income growth expectations from the ECB Consumer Expectations Survey to measure the subjective … expected pass-through of inflation to income in the main euro area countries. By aggregating consumers' responses to … methodology allows one to examine how the pass-through varies along the probability distribution of expected inflation, which …

line with empirical evidence, the model predicts a short-term inflation-output trade-off, a liquidity effect …