Disinflationary Booms? Disinflationary Booms?
نویسنده
چکیده
This paper shows that announced credible disinflations under inflation targeting lead to a boom in a standard New Keynesian model (i.e. a disinflationary boom). This finding is robust with respect to various parameterizations and disinflationary experiments. Thus, it differs from previous findings about disinflationary booms under monetary targeting.
منابع مشابه
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We develop and test a New Keynesian model of inflation dynamics based on the presence of idiosyncratic shocks to firms’ marginal costs. We show that if firms ignore economy-wide influences on their marginal costs, inflation will exhibit a greater degree of inertia than the conventional New Keynesian model suggests. Credible disinflationary policies are likely to be accompanied by recessions rat...
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