Disinfiatior, with imperfect credibility
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چکیده
This paper presents a theory of the real effects of disinflation. As in New Kcyncsian models, price adjustment is staggered across firms. As in New Classical models. credihiltty is imperfect: the monetary authorrty may not complete a promised disinflation. The cwnbination of imperfect credibility and staggering yields more plausible results than 4ther of these assumptions alone. In particular. an announced disinflation reduces cx;uctcd output if credibility is sufficiently 1w.v. kc?)* wrds: Business fluctuations; Disintllition
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