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Inflation and Price Level Targeting in a New Keynesian Model

In a New Keynesian macroeconomic model under credible commitment, price level targeting dominates inflation targeting. But with sufficient inflation aversion the inflation targeting central bank can produce quantitatively similar results to one targeting the price level. The current degree of inflation aversion demonstrated by the Bank of England may be sufficient to reap the benefits of price level targeting.
Year of publication:
2002-02
Authors: Chadha, J.S. ; Nolan, Charles
Institutions: Faculty of Economics, University of Cambridge
Subject: inflation targets | intertemporal macro | nominal rigidities | Phillips Curve
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Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Notes:
Ma 3 pages long
Classification: E20 - Consumption, Saving, Production, Employment, and Investment. General ; E32 - Business Fluctuations; Cycles ; F32 - Current Account Adjustment; Short-Term Capital Movements ; F41 - Open Economy Macroeconomics
Source:
Persistent link: https://www.econbiz.de/10005650527
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