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-price model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive … long-run inflation near zero. Despite positive long-run inflation, the Taylor principle ensures determinacy in the model … with firm-level productivity growth, and optimal inflation stabilization policies are standard. In a two-sector extension …
Persistent link: https://www.econbiz.de/10010886886
provide the most precise forecasts for a set of eleven core macroeconomic variables, including GDP growth and CPI inflation …
Persistent link: https://www.econbiz.de/10010887025
to match past inflation. However, the present paper proposes a much larger effect by using the job finding rate as the …
Persistent link: https://www.econbiz.de/10010956041
inflation downward. Debt deflation further depresses consumption, labor demand, and investment, altogether generating a sharp …
Persistent link: https://www.econbiz.de/10010956045
–have crucial implications for the design of monetary policy and for the welfare costs of output and inflation variability. Recent … implications for the welfare costs of steady-state inflation and inflation volatility, and we show that these considerations have … dramatic consequences in assessing the relative price distortions associated with the Great Inflation of 1965-1979. …
Persistent link: https://www.econbiz.de/10005818787
This paper compares the welfare effects of anticipated and unanticipated cost-push shocks within the canonical New Keynesian model with optimal monetary policy. We find that, for empirically plausible degrees of nominal rigidity, the anticipation of a future cost-push shock leads to a higher...
Persistent link: https://www.econbiz.de/10005818832
" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this "persistency … equilibrium setting (in which real variables not only affect inflation, but are also influenced by it), standard wage …
Persistent link: https://www.econbiz.de/10005700522
implications for monetary policy as the central bank has to decide which inflation rate to target. Our results demonstrate that …
Persistent link: https://www.econbiz.de/10005700608
that captures these two phenomena. The model predicts that the optimal rate of long-run inflation is positive and equal to … growth in firm-specific productivity. When linearized at positive optimal inflation, the model is observationally equivalent … to the basic New Keynesian model with homogenous productivity linearized at zero inflation. Optimal stabilization …
Persistent link: https://www.econbiz.de/10008854750
This paper examines the presence of asymmetric behavior in exchange rate pass-through (ERPT) to CPI inflation in 12 …
Persistent link: https://www.econbiz.de/10010956023