INFLATION TARGETING WITH IMPERFECT INFORMATION

• 成果类型: Article
• 署名作者: Araujo, Aloisio; Berriel, Tiago; Santos, Rafael
• 署名单位: Pontificia Universidade Catolica do Rio de Janeiro; Getulio Vargas Foundation; Central Bank of Brazil
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12155
• 发表日期: 2016
• 页码: 255-270
• 关键词: monetary-policy; social value; crises

摘要

In a global games setup with imperfect commitment technology, we show that low targetsthe ones close to the optimal inflation under perfect commitmentare unattainable, leading to a trade-off between low and credible targets. Moreover, since noisy public information helps to coordinate expectations around the announced target, our article supports unconventional policy prescriptions. First, weaker countries need to impose higher targets. Second, less transparency helps to make the announced target credible and then reduces the optimally announced target. Results are based on a general central bank loss function encompassing models traditionally used to discuss central bank decisions.