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Unstable inflation targets
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dc.contributor.author | Branch, William A. | |
dc.contributor.author | Evans, George W. | |
dc.date.accessioned | 2019-05-16T23:37:41Z | |
dc.date.available | 2019-05-16T23:37:41Z | |
dc.date.issued | 2017-06 | |
dc.identifier | 244544273 | |
dc.identifier | 153ff2e9-fb20-4085-82dc-c28624aee91d | |
dc.identifier | 85019428889 | |
dc.identifier | 000404098800007 | |
dc.identifier.citation | Branch , W A & Evans , G W 2017 , ' Unstable inflation targets ' , Journal of Money, Credit and Banking , vol. 49 , no. 4 , pp. 767-806 . https://doi.org/10.1111/jmcb.12397 | en |
dc.identifier.issn | 0022-2879 | |
dc.identifier.uri | https://hdl.handle.net/10023/17712 | |
dc.description | Financial support from National Science Foundation Grant no. SES-1025011 is gratefully acknowledged. | en |
dc.description.abstract | This paper studies long-run inflation targets and stability in an imperfect information environment. When central banks set an inflation target that is not fully communicated, agents draw inferences about inflation from recent data and remain alert to structural change in their econometric model by forming expectations from a forecasting model that is estimated via discounted least squares. Inflation targets can lead agents' beliefs to depart from rational expectations through two channels. First, implementing a higher inflation target can lead to overshooting of the target. Second, there can be nearly self-fulfilling inflation, disinflation, or deflation that arises as an endogenous response to shocks. Policy implications for implementing a higher target without deanchoring expectations are discussed. | |
dc.format.extent | 760795 | |
dc.language.iso | eng | |
dc.relation.ispartof | Journal of Money, Credit and Banking | en |
dc.subject | Inflation target | en |
dc.subject | Monetary policy | en |
dc.subject | Expectations | en |
dc.subject | Adaptive learning | en |
dc.subject | HB Economic Theory | en |
dc.subject | HG Finance | en |
dc.subject | NDAS | en |
dc.subject | BDC | en |
dc.subject | R2C | en |
dc.subject.lcc | HB | en |
dc.subject.lcc | HG | en |
dc.title | Unstable inflation targets | en |
dc.type | Journal article | en |
dc.contributor.institution | University of St Andrews. School of Economics and Finance | en |
dc.identifier.doi | 10.1111/jmcb.12397 | |
dc.description.status | Peer reviewed | en |
dc.date.embargoedUntil | 2019-05-17 |
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