Endogenous Money or Sticky Price? Comment on Monetary Non-neutrality and Inflation Dynamics

In this paper we show that the highly persistent inflation dynamics and its lead-lag relationship with output can be explained by a standard flexible price RBC model augmented with endogenous monetary policy. Endogenous monetary policy acting upon the illusion that price is sticky and money is effective can create price movements that appear to indicate price stickiness, although there is none in the economy.

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Year of publication:	2004-05
Authors:	Wang, Peng-fei ; Wen, Yi
Institutions:	Center for Analytic Economics, Department of Economics

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Classification:	E31 - Price Level; Inflation; Deflation ; E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005002339