Tax distortions and the case for price stability

• 成果类型: Article; Proceedings Paper
• 署名作者: Collard, F; Dellas, H
• 署名单位: University of Bern; Centre National de la Recherche Scientifique (CNRS); Universite de Toulouse; Universite Toulouse 1 Capitole; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2004.08.003
• 发表日期: 2005
• 页码: 249-273
• 关键词: price stability; tax distortions; optimal monetary policy

摘要

We investigate the case for price stability in the general version of the New Keynesian (NNS) model with capital and several shocks. The model includes. in addition to the standard imperfect competition and monetary frictions, a non-trivial, endogenous tax distortion. We find that the case for perfect price stability is not significantly weakened. Optimal policy tolerates a small amount of output gap and price variability by reacting less strongly to supply and fiscal shocks in comparison to a policy that aims at perfect price stabilization. (C) 2004 Elsevier B.V. All rights reserved.