Nishiyama, Shin-Ichi - Econometric Society - 2004
In times of low-inflation, conventional monetary policy is perpetually exposed to the risk of being caught by the … this risk can be possibly circumvented by targeting a small but positive inflation rate - i.e., so-called the ââ …‚¬Ëœbuffer’ role of an inflation target. In this paper, based on the stylized framework of a central bank's linear-quadratic dynamic …