How much inflation is necessary to grease the wheels?

• 成果类型: Article
• 署名作者: Kim, Jinill; Ruge-Murcia, Francisco J.
• 署名单位: Universite de Montreal; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2009.03.004
• 发表日期: 2009
• 页码: 365-377
• 关键词: Optimal inflation; Asymmetric adjustment costs; Downward wage rigidity; nonlinear dynamics

摘要

Tobin's proposition that inflation greases the wheels of the labor market is studied using a simple dynamic stochastic general equilibrium model with asymmetric wage adjustment costs. The simulated method of moments is used to estimate the nonlinear model based on its second-order approximation. Optimal inflation is determined by a benevolent government that maximizes the households' welfare. Econometric results indicate that nominal wages are downwardly rigid and that the optimal level of grease inflation for the U.S. economy is about 0.35% per year, with a 95% confidence interval ranging from 0.04% to 0.87%. (C) 2008 Elsevier B.V. All rights reserved.