Do Institutional Factors Matter for the Speed of Disinflation?
A central issue for macroeconomic policy is the optimal speed of disinflation. The cold turkey view states that a credible disinflation is less costly if it is quick. An alternative view is that gradualism is less costly because of frictions in wage and price setting. Institutional factors, such as central bank independence or labor market structure, are argued to be important in influencing expectations or wage responsiveness. The paper examines whether various institutional factors explain the disinflation path taken by 21 OECD countries. The cross country analysis finds that institutional factors have no influence on the speed of disinflation; most important is the level of inflation before the disinflation.
Volume (Year): 133 (1997)
Issue (Month): III (September)
|Contact details of provider:|| Postal: c/o SNB/BNS, Börsenstrasse 15, PO Box 2800, CH-8022 Zürich|
Phone: +41 58 631 32 34
Web page: http://www.sjes.ch
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ses:arsjes:1997-iii-13. 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: (Peter Steiner)
If references are entirely missing, you can add them using this form.