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The Central Bank Inflation Bias in the Presence of Asymmetric Preferences and Non-Normal Shocks

Author

Listed:
  • George Christodoulakis

    (Manchester Business School, University of Manchester)

  • David Peel

    (Lancaster University Management School)

Abstract

We investigate the nature of the inflation bias in a model that exhibits asymmetries in preferences and non–normality in shocks but simplifies to the classic Barro-Gordon problem as a special case. The inflation bias is shown to depend on the trade-off between preference, structural and the scale and shape parameters of the model.

Suggested Citation

  • George Christodoulakis & David Peel, 2009. "The Central Bank Inflation Bias in the Presence of Asymmetric Preferences and Non-Normal Shocks," Economics Bulletin, AccessEcon, vol. 29(3), pages 1608-1620.
    • Handle: RePEc:ebl:ecbull:eb-08e50023
    as

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    References listed on IDEAS

    as
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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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