Monetary Policy When the Phillips Curve Is Quite Flat

• 成果类型: Article
• 署名作者: Beaudry, Paul; Hou, Chenyu; Portier, Franck
• 署名单位: University of British Columbia; The Chinese University of Hong Kong, Shenzhen; University of London; University College London; Center for Economic & Policy Research (CEPR)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20220088
• 发表日期: 2024
• 页码: 1-28
• 关键词: cost-channel; inflation dynamics; expectations; transmission; liquidity

摘要

This paper highlights how the presence of a monetary policy cost channel can offer new insights into the relation between monetary policy and inflation when the Phillips curve is quite flat. For instance, we highlight a key condition whereby lax monetary policy can push the economy to a low -inflation trap, and we discuss how, under the same condition, standard policy rules targeting inflation may need to be modified. In the empirical part of the paper, we explore the relevance of the condition that gives rise to these observations. The results support the key condition we emphasize.