Oligopolistic competition and optimal monetary policy

Arbeitspapier

The literature has shown that product market frictions and firms dynamic play a crucial role in reconciling standard DSGE with several stylized facts. This paper studies optimal monetary policy in a DSGE model with sticky prices and oligopolistic competition. In this model firms' monopolistic rents induce both intra-temporal and intertemporal time-varying wedges which induce inefficient fluctuations of employment and consumption. The monetary authority faces a trade-off between stabilizing inflation and reducing inefficient fluctuations, which is resolved by using consumer price inflation as a state contingent sale subsidy. An analysis of the welfare gains of alternative rules show that targeting mark-ups and asset prices might improve upon a strict inflation targeting.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Kiel Working Paper ; No. 1552

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: Product market frictions ; oligopolistic competition ; optimal monetary policy ; Geldpolitik ; Dynamisches Gleichgewicht ; Allgemeines Gleichgewicht ; Stochastischer Prozess ; Oligopol ; Preisrigidität ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Faia, Ester
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/28379
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ