منابع مشابه
Price-Level Targeting and Risk Management in a Low-Inflation Economy
With inflation and policy interest rates at historically low levels, policymakers show great concern about "downside tail risks" due to a zero lower bound on nominal interest rates. Low probability or tail events, such as sustained deflation or recession, are disruptive for the economy and can be difficult to resolve. This paper shows that price-level targeting mitigates downside tail risks res...
متن کاملPrice 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...
متن کاملPrice-level targeting versus inflation targeting over the long-term
This paper investigates the long-term impact of price-level targeting on social welfare in an overlapping generations model in which the young save for old age by investing in productive capital and indexed and nominal government bonds. A key feature of the model is that the extent of bond indexation is determined endogenously in response to monetary policy as part of an optimal commitment Rams...
متن کاملPrice Level Targeting vs. Ination Targeting: A Free Lunch?
Price level targeting (without base drift) and ination targeting (with base drift) are compared with persistence in output (generated by sticky prices, for instance). Counter to conventional wisdom, price level targeting results in lower short-run ination variability than ination targeting (if output is at least moderately persistent). Price level targeting also eliminates any average inati...
متن کاملEnergy price risk management
The price of electricity is far more volatile than that of other commodities normally noted for extreme volatility. Demand and supply are balanced on a knife-edge because electric power cannot be economically stored, end user demand is largely weather dependent, and the reliability of the grid is paramount. The possibility of extreme price movements increases the risk of trading in electricity ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2015
ISSN: 1556-5068
DOI: 10.2139/ssrn.2635380