Discretionary monetary policy and inflation persistence

• 成果类型: Article
• 署名作者: Westelius, NJ
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2004.05.006
• 发表日期: 2005
• 页码: 477-496
• 关键词: Monetary policy; disinflation; credibility; Inflation persistence

摘要

Rational expectations models of staggered price/wage contracts have failed to replicate the observed persistence in inflation and unemployment during disinflationary periods. The current literature on this persistency puzzle has focused on augmenting the nominal contract model with imperfect credibility and learning. In this paper, I re-examine the persistency puzzle by focusing on the discretionary nature of monetary policy. I show that when the central bank is allowed to re-optimize a quadratic loss function each period, imperfect credibility and learning, even in the absence of staggered contracts, can generate a significant amount of inflation persistence and employment losses during a disinflationary period. (c) 2005 Elsevier B.V. All rights reserved.