This paper builds a general equilibrium model with working capital and currency substitution and uses this model to assess welfare gains from disin‡ation. It is found that welfare gains from disin‡ation are higher when the baseline in‡ation rate and the elasticity of substitution between foreign currency and domestic deposits are higher. Indeed the gains from disin‡ation can be quite large comp...

The implementation of explicit quantitative in°ation targets elucidates the assessment of credibility of future monetary policy. Here the explicit in°ation target is time-varying and stochastic with asymmetric information. It is shown that central bank independence promotes lower in°ation but not at the cost of increased output variability. Marked political instability and instrument dependence...

Seitz and Tödter argue, counter to Svensson, that the P ¤ model provides a rationale for money-growth targeting. In particular, they argue that " money growth targeting is a special form of in ‡ation forecast targeting based on a 'limited' information set. In contrast to 'full information' in ‡ation forecast targeting, money growth targeting is likely to be more robust under changing conditions...

Vie present a method of transforming an extract-based DNA computation that is error-prone into one that is relatively error-free. These improvements in error rates are achieved without the supposition of any improvements in the reliability of t he underlying laboratory techniques. Vle assume that only two types of errors are possible: a DNA strand may be incorrectly processed or it may be lost ...

This paper uses a structurally estimatedmacroeconometricmodel, denoted the MC model, to evaluate in ation targeting in the United States. Various interest rate rules are tried with differing weights on in ation and output, and various optimal control problems are solved using differing weights on in ation and output targets. Price-level targeting is also considered. The results show that 1) the...

Price level targeting (without base drift) and in‡ation targeting (with base drift) are compared with persistence in output (generated by sticky prices, for instance). Counter to conventional wisdom, price level targeting results in lower short-run in‡ation variability than in‡ation targeting (if output is at least moderately persistent). Price level targeting also eliminates any average in‡ati...

This paper introduces a new model of trend in‡ation. In contrast to many earlier approaches, which allow for trend in‡ation to evolve according to a random walk, ours is a bounded model which ensures that trend in‡ation is constrained to lie in an interval. The bounds of this interval can either be …xed or estimated from the data. Our model also allows for a time-varying degree of persistence i...

Robert Hill has made a valuable contribution to the conference in a number of respects. First, he has provided a succinct and thought-provoking discussion of the broad range of issues relevant to measuring infl ation. Second, he has highlighted a number of developments that could potentially alter the way in which we measure infl ation. For example, as Robert has explained, a reduction in the m...

This paper provides new insight into the relationship between in‡ation and consumer price setting by examining a large data set of Mexican consumer prices covering episodes of both low and high in‡ation, as well as the transition between the two. The overall portrait is one in which the economy shares several characteristics of time dependent models when the annual in‡ation rate is low (below 1...