Sacrifice ratio or welfare gain ratio? Disinflation in a DSGE monetary model

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:	2010-01
Authors:	Ascari, Guido ; Ropele, Tiziano
Institutions:	Banca d'Italia
Subject:	disinflation \| sacrifice ratio \| non-linearities

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Extent:	application/pdf
Series:	Temi di discussione (Economic working papers).
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 736
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008480535