This paper evaluates new evidence on price setting practices and inflation persistence in the euro area with respect 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 …

We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in …-for-one: increases in the optimal inflation rate are generally lower than declines in the steady state real interest rate. Our approach … allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while …

-level targeting and compare it to inflation targeting. Domain of attraction of the targeted steady state gives a robustness criterion …

This paper considers the performance of average inflation targeting (AIT) policy in a New Keynesian model with adaptive … inflation targeting policy. Policymakers can improve outcomes under AIT by (i) targeting a discounted average of inflation, or …