AMBIGUITY, MONETARY POLICY AND TREND INFLATION

• 成果类型: Article
• 署名作者: Masolo, Riccardo M.; Monti, Francesca
• 署名单位: Bank of England
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvaa020
• 发表日期: 2021
• 页码: 839-871
• 关键词: price; beliefs; utility; shocks

摘要

Allowing for ambiguity about the behavior of the policymaker in a simple New-Keynesian model gives rise to wedges between long-run inflation expectations, trend inflation, and the inflation target. The degree of ambiguity we measure in Blue Chip survey data helps explain the dynamics of long-run inflation expectations and the inflation trend measured in the US data. Ambiguity also has implications for monetary policy. We show that it is optimal for policymakers to lean against the households' pessimistic expectations, but also document the limits to the extent the adverse effects of ambiguity can be undone.