Christodoulakis, George; Peel, David - In: Economics Bulletin 29 (2009) 3, pp. 1608-1620
We investigate the nature of the inflation bias in a model that exhibits asymmetries in preferences and non–normality in shocks but simplifies to the classic Barro-Gordon problem as a special case. The inflation bias is shown to depend on the trade-off between preference, structural and...