Price level targeting with evolving credibility
نویسندگان
چکیده
منابع مشابه
Price Level Targeting and Stabilization Policy
We construct a dynamic stochastic general equilibrium model to study optimal monetary stabilization policy. Prices are fully exible and money is essential for trade. Our main result is that if the central bank pursues a price-level target, it can control ination expectations and improve welfare by stabilizing short-run shocks to the economy. The optimal policy involves smoothing nominal inter...
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This paper critically examines a new literature that supports price-level targeting (PT) over inflation targeting (IT).1 This literature shows that it is better for the central bank (the Bank) to gradually wrestle the price level, rather than the inflation rate, back to the target path. PT provides a firm nominal anchor for expectations, and thereby conditions private sector expectations in a w...
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ژورنال
عنوان ژورنال: Journal of Monetary Economics
سال: 2020
ISSN: 0304-3932
DOI: 10.1016/j.jmoneco.2019.09.009