When inflation picks up, central banks are most concerned that the de-anchoring of inflation expectations and the ignition of wage-price spirals will trigger inflation dynamic instability. However, such scenarios do not materialize in the standard New Keynesian theoretical framework for monetary...

A large body of empirical work is clear-cut in suggesting that the international post-war inflation experience may be described in terms of switches among multiple regimes. A definite explanation of this stylized fact, however, is still under debate. In this paper, we model an economy composed...

A huge amount of empirical evidence is clear-cut in suggesting that post-war inflation rates dynamics in several industrialized countries may be modeled as switches among multiple regimes (i.e., time series for inflation rates are typically piecewise stationary around two or more averages). In...