Foreign price shocks have significant effects on functional income distribution and on inflation inequality. By ….g. food prices for low-wage workers). Based on the conflicting-claims inflation literature, we propose a new extension to this … with an inflation-targeting regime. We investigate the impacts of foreign price shocks on income and inflation inequality …

initial macroeconomic conditions of the simulations correspond to the high inflation environment of early 2022. The simulation … rational expectations for all Taylor rule parametrisations. Under hybrid expectations, the inflation rate is much more … persistent than under the rational expectations; three years is not enough to reach the inflation target of two percent, even for …