Price-level versus inflation targeting

• 成果类型: Article
• 署名作者: Vestin, David
• 署名单位: European Central Bank
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.07.015
• 发表日期: 2006
• 页码: 1361-1376
• 关键词: price-level targeting; inflation targeting; new-keynesian model; DISCRETION

摘要

This paper shows that price-level targeting outperforms inflation targeting in the standard New-Keynesian model, under the assumption that the central bank is forced to operate in an environment characterized by discretion. In the benchmark case, with no persistence in the shocks, the commitment solution can be fully replicated. Intuitively, price-level targeting introduces history dependence and a stationary level of prices, both of which are prominent features of the commitment solution. (c) 2006 Elsevier B.V. All rights reserved.