Defending zero inflation: all for naught
AbstractEconomists and policymakers disagree on the lengths central banks should go in pursuit of price stability and, in fact, on exactly what price stability means. This essay advocates that central banks try to maintain stable price levels in their countries, and it argues that the benefits of achieving this objective are worth the transition costs. The essay reviews some of the relevant academic literature on the economic effects of inflation and specifically addresses the issues of transition cost, fiscal dominance, and credibility.
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Bibliographic InfoArticle provided by Federal Reserve Bank of Minneapolis in its journal Quarterly Review.
Volume (Year): (1991)
Issue (Month): Spr ()
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- Chari, V V & Christiano, Lawrence J & Kehoe, Patrick J, 1991.
"Optimal Fiscal and Monetary Policy: Some Recent Results,"
Journal of Money, Credit and Banking,
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- V. V. Chari & Lawrence J. Christiano & Patrick J. Kehoe, 1991. "Optimal fiscal and monetary policy: some recent results," Staff Report 147, Federal Reserve Bank of Minneapolis.
- Thomas F. Cooley & Gary D. Hansen, 1991.
"The welfare costs of moderate inflations,"
Federal Reserve Bank of Cleveland, pages 483-518.
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- Laurence Ball & Stephen G. Cecchetti, 1990. "Inflation and Uncertainty at Long and Short Horizons," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 215-254.
- David Altig & Charles T. Carlstrom, 1991. "Bracket creep in the age of indexing: have we solved the problem?," Working Paper 9108, Federal Reserve Bank of Cleveland.
- Dimitri B. Papadimitriou & L. Randall Wray, 1994.
"Flying Blind: The Federal Reserve's Experiment with Unobservables,"
Economics Working Paper Archive
wp_124, Levy Economics Institute.
- Dimitri B. Papadimitriou & L. Randall Wray, 1999. "Flying Blind: The Federal Reserve's Experiment with Unobservables," Macroeconomics 9903011, EconWPA.
- Ireland, Peter N., 1995.
"Optimal disinflationary paths,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 19(8), pages 1429-1448, November.
- Samantha Johnson, 1993. "The costs of inflation revisited," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, March.
- Michael T. Belongia, 1992. "Selecting an intermediate target variable for monetary policy when the goal is price stability," Working Papers 1992-008, Federal Reserve Bank of St. Louis.
- Willem Thorbeck, 1997. "Disinflationary Monetary Policy and the Distribution of Income," Macroeconomics 9711008, EconWPA.
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