This paper offers several contributions to actual research and discussion on monetary policy. It clarifies the relationship between uncertainty of inflation persistence and optimal monetary policy and discusses the consequences of the recent Blanchard proposal to implement a higher inflation...

This paper indicates a contradiction with respect to the optimal neutral policy rate between two seminal contributions on the implications of uncertain economic dynamics for optimal monetary policy. While Craine (1979) implies tighter policy, Söderström (2002) finds certainty equivalence. This...

This paper is an application of the framework developed in Pinkwart (2010a), which allows to analyze changes of the monetary policy regime under uncertain inflation dynamics that alter the steady state properties of the underlying model as well as the stochastic dependencies between model...

This paper offers several contributions to actual research and discussion on monetary policy. It clarifies the relationship between uncertainty of inflation persistence and optimal monetary policy and discusses the consequences of the recent Blanchard proposal to implement a higher inflation...

Against the background of the recent discussion whether the smoothing behavior of the Fed detected by empirical Taylor rules is indeed a fact or rather a statistically fiction, this paper re-examines the empirical evidence for interest rate smoothing for the case of the ECB. Based on data...