Disinflation in a DSGE perspective: sacrifice ratio or welfare gain ratio?

When taken to examine disinflation monetary policies, the current workhorse DSGE model of business cycle fluctuations successfully accounts for the main stylized facts in terms of recessionary effects and sacrifice ratio. We complement the transitional analysis of the short-run costs with a rigorous welfare evaluation and show that, despite the long-lasting economic downturn, disinflation entails non-zero overall welfare gains.

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Year of publication:	2009
Authors:	Ascari, Guido ; Ropele, Tiziano
Publisher:	Kiel : Kiel Institute for the World Economy (IfW)
Subject:	Inflationsbekämpfung \| Geldpolitik \| Wohlfahrtseffekt \| Konjunkturtheorie \| Dynamisches Gleichgewicht \| Theorie \| Disinflation \| Sacrifice ratio \| Non-linearities

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Series:	Kiel Working Paper ; 1499
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	598206973 [GVK] hdl:10419/28327 [Handle] RePEc:zbw:ifwkwp:1499 [RePEc]
Classification:	E31 - Price Level; Inflation; Deflation ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit
Source:	EconStor

Persistent link: https://www.econbiz.de/10010265222