Opportunistic Monetary Policy: an Alternative Rationalization
AbstractThis paper offers an alternative rationalization for opportunistic behaviour i.e., a gradual disinflation strategy where policymakers react asymmetrically to supply shocks, opting to disinflate only in recessionary period. Specifically, we show that adaptive expectations combined with asymmetry in the Phillips curve of a specific sort together provide an optimizing justification for opportunism. However, the empirical basis for these conditions to be satisfied in the current low-inflation context of most OECD countries remains however to be established.
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Bibliographic InfoPaper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2005/9.
Length: 17 pages
Date of creation: Dec 2005
Date of revision:
Publication status: Published in Journal of Economics and Business , 58 , October-November 2006, pp. 366-372
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Web page: http://business.cardiff.ac.uk/research/academic-sections/economics/working-papers
More information through EDIRC
Deliberate disinflation; Opportunistic disinflation;
Other versions of this item:
- Minford, Patrick & Srinivasan, Naveen, 2006. "Opportunistic monetary policy: An alternative rationalization," Journal of Economics and Business, Elsevier, vol. 58(5-6), pages 366-372.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-20 (All new papers)
- NEP-CBA-2005-12-20 (Central Banking)
- NEP-MAC-2005-12-20 (Macroeconomics)
- NEP-MON-2005-12-20 (Monetary Economics)
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.:
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