IDEAS home Printed from https://ideas.repec.org/a/jqe/jqenew/v8y2010i2p4-19.html
   My bibliography  Save this article

Monetary Policy in a Low Inflation Environment: Is There Evidence for Opportunistic Behaviour?

Author

Listed:
  • Naveen Srinivasan
  • M. Ramachandran
  • Sudhanshu Kumar

Abstract

The Opportunistic Approach to disinflation is an influential model of optimal monetary policy. This strategy for disinflation suggests that in a low inflation environment policymakers' would give higher weight to inflation stabilization when inflation is strengthening, but higher weight to stabilizing output when the economy is already producing lower inflation via favourable supply shocks. A time-varying parameter (TVP) model is estimated to evaluate its empirical likelihood using US data. Preliminary results support this model during the Greenspan regime.

Suggested Citation

  • Naveen Srinivasan & M. Ramachandran & Sudhanshu Kumar, 2010. "Monetary Policy in a Low Inflation Environment: Is There Evidence for Opportunistic Behaviour?," Journal of Quantitative Economics, The Indian Econometric Society, vol. 8(2), pages 4-19.
  • Handle: RePEc:jqe:jqenew:v:8:y:2010:i:2:p:4-19
    as

    Download full text from publisher

    File URL: http://www.jqe.co.in/journals/JQE_v8_n2_2010_p2.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Minford, Patrick & Srinivasan, Naveen, 2006. "Opportunistic monetary policy: An alternative rationalization," Journal of Economics and Business, Elsevier, vol. 58(5-6), pages 366-372.
    2. Richard Clarida & Jordi Galí & Mark Gertler, 2000. "Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 147-180.
    3. Kalaba, Robert E. & Tesfatsion, Leigh S., 1989. "Time-Varying Linear Regression Via Flexible Least Squares," Staff General Research Papers Archive 11196, Iowa State University, Department of Economics.
    4. Bomfim, Antulio N & Rudebusch, Glenn D, 2000. "Opportunistic and Deliberate Disinflation under Imperfect Credibility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 707-721, November.
    5. Christopher Martin & Costas Milas, 2010. "Testing The Opportunistic Approach To Monetary Policy," Manchester School, University of Manchester, vol. 78(2), pages 110-125, March.
    6. Aksoy, Yunus & Orphanides, Athanasios & Small, David & Wieland, Volker & Wilcox, David, 2006. "A quantitative exploration of the opportunistic approach to disinflation," Journal of Monetary Economics, Elsevier, vol. 53(8), pages 1877-1893, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jqe:jqenew:v:8:y:2010:i:2:p:4-19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (D. M. Nachane) or (). General contact details of provider: http://edirc.repec.org/data/tiesoea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.