Monetary Policy with Uncertain Inflation Persistence

Released on by Mr. Luis Brandão-Marques
preview-18

  • Monetary Policy with Uncertain Inflation Persistence Book Detail

  • Author : Mr. Luis Brandão-Marques
  • Release Date : 2024-03-08
  • Publisher : International Monetary Fund
  • Genre : Business & Economics
  • Pages : 32
  • ISBN 13 :
  • File Size : 92,92 MB
DOWNLOAD BOOK

Monetary Policy with Uncertain Inflation Persistence by Mr. Luis Brandão-Marques PDF Summary

Book Description: When uncertain about inflation persistence, central banks are well-advised to adopt a robust strategy when setting interest rates. This robust approach, characterized by a "better safe than sorry" philosophy, entails incurring a modest cost to safeguard against a protracted period of deviating inflation. Applied to the post-pandemic period of exceptional uncertainty and elevated inflation, this strategy would have called for a tightening bias. Specifically, a high level of uncertainty surrounding wage, profit, and price dynamics requires a more front-loaded increase in interest rates compared to a baseline scenario which the policymaker fully understands how shocks to those variables are transmitted to inflation and output. This paper provides empirical evidence of such uncertainty and estimates a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model for the euro area to derive a robust interest rate path for the ECB which serves to illustrate the case for insuring against inflation turning out to have greater persistence.

Disclaimer: www.yourbookbest.com does not own Monetary Policy with Uncertain Inflation Persistence books pdf, neither created or scanned. We just provide the link that is already available on the internet, public domain and in Google Drive. If any way it violates the law or has any issues, then kindly mail us via contact us page to request the removal of the link.

Inflation Expectations

Inflation Expectations

File Size : 7,7 MB
Total View : 581 Views
DOWNLOAD

Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring t