Trend growth, unemployment and optimal monetary policy

by Wolfgang Lechthaler and Mewael Tesfaselassie

We analyze the implications of changes in the trend growth rate for optimal monetary policy in the presence of search and matching unemployment. We show that trend growth in itself does not generate a trade-off for the monetary authority, but that it interacts importantly with the inefficiencies stemming from the labor market. Higher trend growth exacerbates the inefficiencies of the labor market and therefore calls for larger deviations from price stability.

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Year of publication:	2015
Authors:	Lechthaler, Wolfgang ; Tesfaselassie, Mewael F.
Publisher:	Kiel : Kiel Inst. for the World Economy
Subject:	trend growth \| trend inflation \| unemployment \| Arbeitslosigkeit \| Unemployment \| Wirtschaftswachstum \| Economic growth \| Geldpolitik \| Monetary policy \| Theorie \| Theory \| Phillips-Kurve \| Phillips curve \| Inflation

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Extent:	Online-Ressource (23 S.) graph. Darst.
Series:	Kiel working paper. - Kiel : [Verlag nicht ermittelbar], ISSN 1862-1155, ZDB-ID 2107612-1. - Vol. 2003
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: PDF Reader
Other identifiers:	hdl:10419/112796 [Handle]
Classification:	E12 - Keynes; Keynesian; Post-Keynesian ; E24 - Employment; Unemployment; Wages ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011300631