This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Impact of Imperfect Credibility in a Transition to Price Stability

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Nicolae, Anamaria
Nolan, Charles

Additional information is available for the following registered author(s):

Abstract

In this paper we study the impact of a temporary lack of credibility in a transition to price stability. We quantify the effects of a period of disinflation on temporary output losses, and the impact of the lack of credibility on the optimal speed of disinflation. We demonstrate that the "disinflationary booms" found by Ball (1994) and Ireland (1997) may or may not disappear in an environment with imperfect credibility, depending on the speed of learning relative to the speed of disinflation. Finally, we enquire whether the speed of the Volcker disinflation was excessive or not.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://dx.doi.org/10.1353/mcb.2006.0022
File Format: application/pdf
File Function: full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 38 (2006)
Issue (Month): 1 (February)
Pages: 47-66
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:mcb:jmoncb:v:38:y:2006:i:1:p:47-66

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lucas, Robert Jr. & Stokey, Nancy L., 1983. "Optimal fiscal and monetary policy in an economy without capital," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 55-93. [Downloadable!] (restricted)
    Other versions:
  2. Thomas J. Sargent, 1982. "The Ends of Four Big Inflations," NBER Chapters, in: Inflation: Causes and Effects, pages 41-98 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  3. Peter N. Ireland, 1995. "Optimal disinflationary paths," Working Paper 95-01, Federal Reserve Bank of Richmond. [Downloadable!]
    Other versions:
  4. Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August. [Downloadable!] (restricted)
    Other versions:
  5. Peter N. Ireland, 1997. "Stopping inflations, big and small," Proceedings, Federal Reserve Bank of Cleveland, pages 759-782.
    Other versions:
  6. Erceg, Christopher J. & Levin, Andrew T., 2003. "Imperfect credibility and inflation persistence," Journal of Monetary Economics, Elsevier, vol. 50(4), pages 915-944, May. [Downloadable!] (restricted)
    Other versions:
  7. Stefania Albanesi & V. V. Chari & Lawrence J. Christiano, 2003. "Expectation Traps and Monetary Policy," Review of Economic Studies, Blackwell Publishing, vol. 70(4), pages 715-741, October. [Downloadable!] (restricted)
    Other versions:
  8. Benabou, R. & Konieczny, J.D., 1993. "On Inflation and Output with Costly Price Changes: A Simple Unifying Result," Working Papers 93006, Wilfrid Laurier University, Department of Economics.
    Other versions:
  9. Robert King & Alexander L. Wolman, 1999. "What Should the Monetary Authority Do When Prices Are Sticky?," NBER Chapters, in: Monetary Policy Rules, pages 349-404 National Bureau of Economic Research, Inc. [Downloadable!]
  10. Aubhik Khan & Robert G. King & Alexander L. Wolman, 2003. "Optimal Monetary Policy," Review of Economic Studies, Blackwell Publishing, vol. 70(4), pages 825-860, October. [Downloadable!] (restricted)
    Other versions:
  11. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June. [Downloadable!] (restricted)
    Other versions:
  12. Ball, Laurence, 1995. "Disinflation with imperfect credibility," Journal of Monetary Economics, Elsevier, vol. 35(1), pages 5-23, February. [Downloadable!] (restricted)
    Other versions:
  13. Danziger, Leif, 1988. "Costs of Price Adjustment and the Welfare Economics of Inflation and Disinflation," American Economic Review, American Economic Association, vol. 78(4), pages 633-46, September. [Downloadable!] (restricted)
  14. Laurence Ball & N. Gregory Mankiw & David Romer, 1988. "The New Keynsesian Economics and the Output-Inflation Trade-off," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1988-1), pages 1-82. [Downloadable!]
  15. Robert J. Gordon, 1982. "Why Stopping Inflation May Be Costly: Evidence from Fourteen Historical Episodes," NBER Chapters, in: Inflation: Causes and Effects, pages 11-40 National Bureau of Economic Research, Inc. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tatiana Damjanovic & Charles Nolan, 2005. " Some Welfare Implications of Optimal Stabilization Policy in an Economy with Capital and Sticky Prices," CDMA Working Paper Series 0509, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
    Other versions:
  2. Marco Bonomo & Carlos Carvalho, 2008. "Imperfectly credible disinflation under endogenous time-dependent pricing," Staff Reports 355, Federal Reserve Bank of New York. [Downloadable!]
    Other versions:
  3. Marco Bonomo & Carlos Viana de Carvalho, 2005. "Endogenous Time-Dependent Rules and the Costs of Disinflation with Imperfect Credibility," Macroeconomics 0509004, EconWPA. [Downloadable!]
    Other versions:
  4. Benoît Mojon, 2005. "When did unsystematic monetary policy have an effect on inflation?," Working Paper Series 559, European Central Bank. [Downloadable!]
    Other versions:
  5. Tatiana Damjanovic & Charles Nolan, 2006. " Relative Price Distortions and Inflation Persistence," CDMA Working Paper Series 0611, Centre for Dynamic Macroeconomic Analysis. [Downloadable!]
  6. Julia Lendvai, 2006. "Inflation dynamics and regime shifts," Working Paper Series 684, European Central Bank. [Downloadable!]
  7. Guido Ascari & Tiziano Ropele, 2009. "Disinflation in a DSGE Perspective: Sacrifice Ratio or Welfare Gain Ratio?," Kiel Working Papers 1499, Kiel Institute for the World Economy. [Downloadable!]
  8. Lynne Evans & Anamaria Nicolae, 2008. "The Output Effect Of Stopping Inflation When Velocity Is Time Varying," Romanian Economic Business Review, Romanian-American University, vol. 3(2), pages 60-77, June. [Downloadable!]
Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by encouraging others to use our services.

This page was last updated on 2009-11-12.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.