Average inflation targeting: Time inconsistency and ambiguous communication

• 成果类型: Article
• 署名作者: Jia, Chengcheng; Wu, Jing Cynthia
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Cleveland; University of Notre Dame; National Bureau of Economic Research
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2023.05.010
• 发表日期: 2023
• 页码: 69-86
• 关键词: Inflation expectations; Average inflation targeting; time inconsistency; Ambiguous communication

摘要

We study the implications of average inflation targeting (AIT). AIT improves the inflationoutput trade-off when the private sector believes the central bank's announcement. Ex post, the central bank has the incentive to implement inflation targeting instead to maximize social welfare. Next, we examine whether and how the central bank can convince the private sector, and find ambiguous communication helps the central bank gain credibility and improve welfare. These results apply to several key aspects of AIT announcement and do not rely on specific modeling assumptions.