Trend inflation, wage and price rigidities, and productivity growth

• 成果类型: Article
• 署名作者: Amano, Robert; Moran, Kevin; Murchison, Stephen; Rennison, Andrew
• 署名单位: Bank of Canada; Laval University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2009.03.001
• 发表日期: 2009
• 页码: 353-364
• 关键词: Optimal inflation; Optimal deflation; monetary policy; nominal rigidities

摘要

What are the steady-state implications of inflation in a general-equilibrium model with real per capita output growth and staggered nominal price and wage contracts? Surprisingly, a benchmark calibration implies an optimal inflation rate of -1.9 percent. The analysis also shows that trend inflation has important effects on the economy when combined with nominal contracts and real output growth. Steady-state output and welfare losses are quantitatively important even for low values of trend inflation. Further, nominal wage contracting is found to be quantitatively more important than nominal price contracting in generating the results. This conclusion does not arise from price dispersion per se, but from an effect of nominal Output growth on the optimal markup of monopolistically competitive labour Suppliers. Finally, accounting for productivity growth is found to be important for calculating the welfare costs of inflation. Indeed, the presence of 2 percent productivity growth increases the welfare costs of inflation in the benchmark specification by a factor Of four relative to the no-growth case. (C) 2009 Elsevier B.V. All rights reserved.