Price level targeting with evolving credibility

• 成果类型: Article
• 署名作者: Honkapohja, Seppo; Mitra, Kaushik
• 署名单位: Aalto University; University of Birmingham; University of Birmingham
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.09.009
• 发表日期: 2020
• 页码: 88-103
• 关键词: Adaptive learning; Limited credibility; inflation targeting; Zero interest rate lower bound

摘要

Global learning dynamics for price-level targeting (PLT) monetary policy are analyzed and compared to inflation targeting in a nonlinear New Keynesian model. Domain of attraction of target steady state is a new robustness criterion for policy regimes. Robustness of PLT depends on whether a known target path is incorporated into learning. Credibility is measured by accuracy of this forecasting method relative to simple statistical forecasts evolving through reinforcement learning. Initial credibility and target price are key factors influencing performance. Model results are in line with the Swedish experience of price stabilization in1930's. (C) 2019 The Authors. Published by Elsevier B.V.