Inflation persistence and flexible prices

• 成果类型: Article
• 署名作者: Dittmar, RD; Gavin, WT; Kydland, FE
• 署名单位: Carnegie Mellon University; Federal Reserve System - USA; Federal Reserve Bank - St. Louis
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.0020-6598.2005.00317.x
• 发表日期: 2005
• 页码: 245-261
• 关键词: risk-aversion; consumption; money

摘要

If the central bank follows an interest rate rule, then inflation is likely to be persistent, even when prices are fully flexible. Any shock, whether persistent or not, may lead to inflation persistence. In equilibrium, the dynamics of inflation are determined by the evolution of the spread between the real interest rate and the central bank's target. Inflation persistence can be characterized by a vector autocorrelation function relating inflation and output. This article shows that a flexible-price, general-equilibrium business cycle model with money and a central bank using an interest rate target can account for such inflation persistence.