Expectation Traps and Monetary Policy

We describe a class of monetary economies that generate persistent episodes of high and low inflation. In this class of economies, variations in expectations can lead private agents to take actions which then make it optimal for the monetary authority to validate those expectations. We think these models deserve attention because they display several good empirical properties.

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Year of publication:	2002-01-10
Authors:	Albanesi, Stefania ; Chari, V. V. ; Christiano, Lawrence J.
Institutions:	EconWPA
Subject:	Inflation Time-Consistency

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Extent:	application/pdf
Series:	Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - Acrobat PDF; prepared on IBM PC ; to print on HP; pages: 42 ; figures: included. 42 pages PDF format 42 pages
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; E4 - Money and Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005561262