Learning About Inflation Measures for Interest Rate Rules High quality books
Learning About Inflation Measures for Interest Rate Rules
By:Luis-Felipe Zanna,Mr. Marco Airaudo
Published on 2010-12-01 by International Monetary Fund
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules that respond to inflation measures differing in their degree of price stickiness. We find that rules responding to headline inflation measures that assign a positive weight to the inflation of the sector with low price stickiness are more prone to generate macroeconomic instability than rules that respond exclusively to the inflation of the sector with high price stickiness. By this we mean that they are more prone to induce non-learnable fundamental-driven equilibria, learnable self-fulfilling expectations equilibria, and equilibria where fluctuations are unbounded. We discuss how our results depend on the elasticity of substitution across goods, the degree of heterogeneity in price rigidity, as well as on the timing of the rule.
This Book was ranked at 32 by Google Books for keyword Nominal rigidity.
Book ID of Learning About Inflation Measures for Interest Rate Rules's Books is 78hWEaLHJVAC, Book which was written byLuis-Felipe Zanna,Mr. Marco Airaudohave ETAG "RiAJ0j/fwWA"
Book which was published by International Monetary Fund since 2010-12-01 have ISBNs, ISBN 13 Code is 9781455214945 and ISBN 10 Code is 1455214949
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