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Autore: | Alichi Ali |
Titolo: | Inflation targeting under imperfect policy credibility / / prepared by Ali Alichi ...[et. al.] |
Pubblicazione: | [Washington D.C.], : International Monetary Fund, 2009 |
Edizione: | 1st ed. |
Descrizione fisica: | 1 online resource (32 p.) |
Disciplina: | 332.1 |
Soggetto topico: | Inflation (Finance) |
Fiscal policy | |
Note generali: | Description based upon print version of record. |
Nota di bibliografia: | Includes bibliographical references. |
Nota di contenuto: | Contents; I. Introduction; II. The Model; A. Inflation Process with Endogenous Credibility; A.1 Inflation equation-an expectations-augmented Phillips curve; A.2 Output Gap equation; A.3 Exchange rate-real interest rate parity equation; A.4 Monetary policy loss function; A.5 Note on calibration; III. Optimal Disinflation; A. Initial Condition; B. Disinflation Under Various Degrees of Credibility; IV. Optimal Responses to Shocks; A. Initial Conditions; B. Supply Shocks; C. Demand Shocks; V. Costs of Delaying Interest Rate Increase Under Imperfect Credibility; VI. Concluding Remarks; References |
Figures1. Disinflation with Equal Weights on Inflation, Output and Interest Rate Variability; 2. Disinflation with Lower Weights on Output and Interest Rate Variability; 3. Responses to Unfavorable and Favorable Supply Shocks (Positive Shock Circle; Negative Shock Triangle); 4. Responses to Positive and Negative Demand Shocks (Positive Shock Circle Negative Shock Triangle; 5. Cost of Delaying Interest Rate Hikes in Response to an Unfavorable Supply Shock in an Economy with High Inflation and Low Initial Credibility (No Delay Triangle; Delay Circle) | |
Sommario/riassunto: | This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional model in three ways: an endogenous policy credibility process, by which monetary policy can gain or lose credibility over time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function. The model highlights problems associated with the practice of setting a series of rigid near-term inflation targets. Also, unfavorable supply shocks pose a difficult problem: an appropriate response involves an interest rate increase, some loss of output, and a period of increased inflation. A delayed response can result in a prolonged period of stagflation. |
Titolo autorizzato: | Inflation targeting under imperfect policy credibility |
ISBN: | 1-4623-2348-0 |
1-4527-7227-4 | |
1-282-84314-1 | |
9786612843143 | |
1-4518-7241-0 | |
Formato: | Materiale a stampa |
Livello bibliografico | Monografia |
Lingua di pubblicazione: | Inglese |
Record Nr.: | 9910824789103321 |
Lo trovi qui: | Univ. Federico II |
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