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On the risk of long-run deflation

  • Tambakis, Demosthenes N.

I determine expected long-run inflation in a two-state New Keynesian model driven by natural interest-rate uncertainty. Monetary policy switches between discretion in ‘normal times’ and zero-lower-bound episodes when it is passive. Long-run US inflation ranges from −1.8% to +1.2% p.a.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 122 (2014)
Issue (Month): 2 ()
Pages: 176-181

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Handle: RePEc:eee:ecolet:v:122:y:2014:i:2:p:176-181
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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