Optimal monetary policy in an economy with inflation persistence

• 成果类型: Article
• 署名作者: Steinsson, J
• 署名单位: Harvard University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2003.08.008
• 发表日期: 2003
• 页码: 1425-1456
• 关键词: Optimal monetary policy; Phillips curve; Inflation persistence; cost push shock

摘要

This paper studies optimal monetary policy in a model where inflation is persistent. Two types of price setters are assumed to exist. One acts rationally given Calvo-type constraints on price setting. The other type sets prices according to a rule-of-thumb. This results in a Phillips curve with both a forward-looking term and a backward-looking term. The Phillips curve nests a standard purely forward-looking Phillips curve as well as a standard purely backward-loo king Phillips curve as special cases. A cost push supply shock is derived from microfoundations by adding a time varying income tax and by making the elasticity of substitution between goods stochastic. A central bank loss function for this model is derived from a second-order Taylor approximation of the household's welfare function. Optimal monetary policy for different relative values of the forward- and backward-looking terms is then analyzed for both the commitment case and the case of discretion. (C) 2003 Elsevier B.V. All rights reserved.