IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Inflation Targeting, Price-Level Targeting, the Zero Lower Bound, and Indeterminacy

Listed author(s):
  • Steve Ambler

    (CIRPÉE, UQAM, C.D. Howe Institute; The Rimini Centre for Economic Analysis, Italy)

  • Jean-Paul Lam

    ()

    (Department of Economics, University of Waterloo; The Rimini Centre for Economic Analysis, Italy)

We compare inflation targeting and price-level targeting in the canonical New Keynesian model, with particular attention to multiple steady-states, indeterminacy, and global stability. Under price-level targeting we show the following: 1) the well-known problem of multiple steady-state equilibria under inflation targeting is absent; 2) the model’s dynamics close to the steady state are determinate for a much wider range of parameter values; 3) the model is globally saddlepoint stable. These results provide additional arguments in favour of price-level targeting as a monetary policy framework.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.rcfea.org/RePEc/pdf/wp15-03.pdf
Download Restriction: no

Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 15-03.

as
in new window

Length:
Date of creation: Feb 2015
Handle: RePEc:rim:rimwps:15-03
Contact details of provider: Postal:
Via Patara, 3, 47921 Rimini (RN)

Phone: +390541434142
Fax: +39054155431
Web page: http://www.rcfea.org
Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:rim:rimwps:15-03. 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: (Marco Savioli)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.