Hitting the elusive inflation target

• 成果类型: Article
• 署名作者: Bianchi, Francesco; Melosi, Leonardo; Rottner, Matthias
• 署名单位: Johns Hopkins University; Duke University; Centre for Economic Policy Research - UK; National Bureau of Economic Research; Federal Reserve System - USA; Federal Reserve Bank - Chicago; Deutsche Bundesbank
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2021.10.003
• 发表日期: 2021
• 页码: 107-122
• 关键词: Asymmetric monetary policy; Deflationary bias; Deflationary spiral; Target range; Framework review

摘要

Since the 2001 recession, average core inflation has been below the Federal Reserve's 2% target. This deflationary bias is a predictable consequence of a symmetric monetary policy strategy that fails to recognize the risk of encountering the zero-lower-bound. An asym-metric rule according to which the central bank responds less aggressively to above-target inflation corrects the bias, improves welfare, and reduces the risk of deflationary spirals - a pathological situation in which inflation keeps falling indefinitely. This approach does not entail any history dependence or commitment to overshoot the inflation target and can be implemented with an asymmetric target range. A counterfactual simulation shows that a modest level of asymmetry would have removed the deflationary bias observed in the United States. (c) 2021 Elsevier B.V. All rights reserved.