We combine an estimated monetary policy rule featuring time-varying trend inflation and stochastic coefficients with a … medium scale New Keynesian framework calibrated on the U.S. economy. We find the impact of variations in trend inflation on … counterfactual exercises suggest that the change in the Federal Reserve's policy response to inflation is likely to have been the …

inflation and real economic growth, since this conventional model focuses instead directly upon real output and the aggregate …

With positive trend inflation, the Taylor principle is not enough to guarantee a determinate equilibrium. We provide … new theoretical results on restoring determinacy in New Keynesian models with positive trend inflation and combine these … variables and the decline in trend inflation during the Volcker disinflation …

In a recent paper, Atkeson and Kehoe (2004) demonstrated the lack of a robust empirical relationship between inflation … relationship by allowing for inflation and growth to have a nonlinear specification dependent on inflation levels. In particular …, we allow for the possibility that high inflation is negatively correlated with growth, while a positive relationship …