commitment model but a more balanced concern relative to inflation and output stability in the discretionary model …

of the New Keynesian Phillips Curve (NKPC) is that they fail to capture the extent of inflation inertia in the data. In …

of the New Keynesian Phillips Curve (NKPC) is that they fail to capture the extent of inflation inertia in the data. In …

, significant welfare losses. Losses increase further when inflation is partly determined by lagged inflation in the Phillips curve …. Targeting positive inflation rates reduces the frequency of a binding lower bound, but tends to reduce welfare compared to a …

inflation, output gap and difference in the interest rate as target variables. The second loss function includes an additional … wage inflation target. The weights assigned to the target variables in the loss functions, i.e. the preferences of monetary … policy, are estimated jointly with the structural parameters in the model. The results imply that inflation variability …

inflation, output gap and difference in the interest rate as target variables. The second loss function includes an additional … wage inflation target. The weights assigned to the target variables in the loss functions, i.e. the preferences of monetary … policy, are estimated jointly with the structural parameters in the model. The results imply that inflation variability …

inflation. Furthermore, home bias in households' preferences allows for real exchange rate fluctuation, giving rise to …

macroeconomic frameworks. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also … characterize the gains from making credible commitments to fight inflation and consider the implications of frictions such as …

dynamics, the weak comovement between economic activity and inflation, and the positive, strong comovement between interest …

This paper studies monetary policy rules in a small open economy with Inflation Targeting, incomplete pass-through and …