What is the seigniorage-maximizing level of inflation? Four models formulae for the seigniorage maximizing inflation rate (SMIR) are compared. Two sticky-price models arrive at very different quantitative recommendations although both predict somewhat lower SMIRs than Cagan’s formula and a variant of a .ex-price model due to Kimbrough (2006). The models differ markedly in how inflation distorts...

This paper argues that the primary objective of monetary policy should be long run price stability or at least a low average rate of in°ation. But there is also a welfare improving role for monetary policy in helping the economy adjust to nonpolicy shocks. This gives rise to a fundamental tension in the conduct of monetary policy. Understanding this tension is central to interpreting the qualit...

This paper studies the nature of monetary policy with …nancial intermediaries that provide loans for working capital in a cash-in-advance model with indivisible labor. Monetary policy occurs through money injections either directly to families or to …nancial intermediaries. Injections to families produce an in‡ation tax while injections directly to …nancial intermediaries provide an in‡ation su...

I give a general formulation of the constraints on models of in ation ended by a rst order phase transition arising from the requirement that they do not produce too many large (observable) true vacuum voids { the `big bubble problem'. It is shown that this constraint can be satis ed by a simple model in Einstein gravity { a variant of `hybrid' or `false vacuum' in ation. The idea that in ation...

This paper investigates the sources of the widely noticed reduction in the volatility of American business cycles since the mid 1980s. Our analysis of reduced volatility emphasises the sharp decline in the standard deviation of changes in real GDP, of the output gap, and of the infl ation rate. The primary results of the paper are based on a small three-equation macro model that includes equati...

The paper discusses the choice between in‡ation targeting and monetary targeting as a strategy for the Eurosystem, the actual strategy that the Eurosystem has recently announced, the framework for policy decisions appropriate for achieving the Eurosystem’s goals, the role of exchange rate management in the EMU, and the Eurosystem’s accountability and transparency. The choice between in‡ation ta...

Opponents of explicit in‡ation targeting (including ex-Chairman Greenspan) have argued that a commitment to a numerical in‡ation target reduces the policy’s ‡exibility, and may hence increase output volatility. Our paper demonstrates that this claim may fail to account for the anchoring e¤ect of explicit targets on expectations and wages (that has been established empirically in various studies...

Gene expression is intricately regulated at the post-transcriptional level by RNA-binding proteins (RBPs) via their interactions with pre-messenger RNA (pre-mRNA) and mRNA during development. However, very little is known about the mechanism regulating RBP activities in RNA metabolism. During the past few years, a large body of evidence has suggested that many RBPs, such as heterogeneous nuclea...