Inflation, nominal interest rates and the variability of output

• 成果类型: Article
• 署名作者: Chadha, B; Tsiddon, D
• 署名单位: International Monetary Fund; Tel Aviv University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(98)00034-8
• 发表日期: 1998
• 页码: 547-573
• 关键词: inflation; output volatility; Price stability

摘要

This paper examines the distribution of output around capacity when money demand is a nonlinear function of the nominal interest rate such that nominal interest rates cannot become negative. When fluctuations in output result primarily from disturbances to the money market, the variance of output is shown to be an increasing function of the trend inflation rate. When they result from disturbances to the goods market, the variance of output is a decreasing function of the trend inflation rate. When both disturbances are significant, there exists, in general, a critical non-zero trend inflation rate that minimizes the variance of output. (C) 1998 Elsevier Science B.V. All rights reserved.