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The relationship between in‡ation and the output gap can be modeled simply and e¤ectively by including an unobserved random walk component in the model. The dynamic properties match the stylized facts and the random walk component satis…es the properties normally required for core in‡ation. The model may be generalized to as to include a term for the expectation of next period’s output, but it ...

OF WESTERN HANDWRITTEN CAPITALS FUSI WANG, LOUIS VUURPIJL AND LAMBERT SCHOMAKER Nijmegen Institute for Cognition and Information P.O.Box 9104, 6500 HE Nijmegen, The Netherlands E-mail: fswang(vuurpijl,s homaker) ni i.kun.nl http://hwr.ni i.kun.nl In this paper, new te hniques are presented using Support Ve tor Ma hines (SVMs) for multilass lassi ation problems. The issue of de omposing a Nlass ...

Since 1993, monetary policy in Australia has targeted CPI infl ation of between 2 and 3 per cent, on average, over the course of the cycle. Over this period, the average of CPI infl ation has fallen markedly to 21⁄2 per cent, the lowest it has been for a sustained period since the 1960s (Figure 1). This paper examines two topics that are important for understanding and interpreting the behaviou...

This paper studies three important questions. First, what distinguishes infl ation targeting (IT) from the practices of other central banks? Second, how has IT practice evolved? And third, what is the empirical evidence on IT practice and performance? With regards to the third question, Ken Kuttner focuses particular attention on the issue of whether infl ation-targeting central banks have been...

Given a set P of n points in Rd and > 0, we consider the problem of constructing weak -nets for P . We show the following: pick a random sample Q of size O(1/ log (1/ )) from P . Then, with constant probability, a weak -net of P can be constructed from only the points of Q. This shows that weak -nets in Rd can be computed from a subset of P of size O(1/ log(1/ )) with only the constant of propo...

This paper uses daily observations on implied in‡ation expectations (di¤erence between nominal and real yields) derived from the US nominal and real Treasury securities to examine the properties of investors expectations for US CPI in‡ation. We assess whether in‡ation expectations are anchored, contained or unmoored. These concepts are often used in central bank communication and their presence...

This paper explores implications of nominal rigidity characterized by a non-constant hazard function for aggregate dynamics. I derive the NKPC under an arbitrary hazard function and parameterize it with the Weibull duration model. The resulting Phillips curve involves lagged in‡ation and lagged expectations. It nests the Calvo NKPC as a limiting case in the sense that the e¤ects of both terms a...