State-Contingent Inflation Contracts and Unemployment Persistence
This paper shows that, if unemployment (or some other real variable) follows a dynamic autoregressive process, the government can still achieve its precommitment outcome in monetary policy by offering the central banker a linear inflation contract, where the penalty for incremental inflation depends positively on lagged unemployment. This note, therefore, offers an extension of recent results of C. Walsh (1995) to the case of persistence in real economic variables such as output or unemployment. Copyright 1997 by Ohio State University Press.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 29 (1997)
Issue (Month): 3 (August)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 |
When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:29:y:1997:i:3:p:286-99. 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: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.