Discretionary monetary policy in the Calvo model

• 成果类型: Article
• 署名作者: Van Zandweghe, Willem; Wolman, Alexander L.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Kansas City; Federal Reserve System - USA; Federal Reserve Bank - Richmond
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE855
• 发表日期: 2019
• 页码: 387-418
• 关键词: Time-consistent optimal monetary policy; DISCRETION; Markov-perfect equilibrium; sticky prices; relative price distortion

摘要

We study discretionary equilibrium in the Calvo pricing model for a monetary authority that chooses the money supply, producing three main contributions. First, price-adjusting firms have a unique equilibrium price for a broad range of parameterizations, in contrast to earlier results for the Taylor pricing model. Second, a generalized Euler equation makes transparent how the monetary authority affects future welfare through its influence on the future state of the economy. Third, we provide global solutions, including welfare analysis, for the transitional dynamics that occur if the monetary authority gains or loses the ability to commit.