Price Level Targeting and Stabilization Policy

We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Prices are fully flexible and money is essential for trade. Our main result is that if the central bank pursues a price-level target, it can control inflation expectations and improve welfare by stabilizing short-run shocks to the economy. The optimal policy involves smoothing nominal interest rates which effectively smooths consumption across states

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Year of publication:	2009
Authors:	Berentsen, Aleksander
Other Persons:	Waller, Christopher J. (contributor)
Publisher:	[2009]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Inflationsbekämpfung \| Anti-inflation policy \| Inflationssteuerung \| Inflation targeting \| Geldpolitik \| Monetary policy \| Stabilisierungspolitik \| Stabilization policy \| Inflationserwartung \| Inflation expectations \| Preisniveau \| Price level \| Allgemeines Gleichgewicht \| General equilibrium

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Extent:	1 Online-Ressource (37 p)
Series:	FRB of St. Louis Working Paper ; No. 2009-033B
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 28, 2009 erstellt
Other identifiers:	10.2139/ssrn.1444960 [DOI]
Classification:	E40 - Money and Interest Rates. General ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10013157395