Arbeitspapier
Optimal trend inflation
We present a sticky-price model incorporating heterogeneous Firms and systematic firm-level productivity trends. Aggregating the model in closed form, we show that it delivers radically different predictions for the optimal inflation rate than canonical sticky price models featuring homogenous Firms: (1) the optimal steady-state inflation rate generically differs from zero and, (2) inflation optimally responds to productivity disturbances. Using micro data from the US Census Bureau to estimate the inflation-relevant productivity trends at the firm level, we find that the optimal US inflation rate is positive. It was slightly above 2 percent in the year 1986, but continuously declined thereafter, reaching about 1 percent in the year 2013.
- Sprache
-
Englisch
- Erschienen in
-
Series: CFS Working Paper Series ; No. 579
- Klassifikation
-
Wirtschaft
Monetary Policy
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
- Thema
-
optimal inflation rate
sticky prices
firm heterogeneity
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Adam, Klaus
Weber, Henning
- Ereignis
-
Veröffentlichung
- (wer)
-
Goethe University Frankfurt, Center for Financial Studies (CFS)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2017
- Handle
- URN
-
urn:nbn:de:hebis:30:3-438653
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Adam, Klaus
- Weber, Henning
- Goethe University Frankfurt, Center for Financial Studies (CFS)
Entstanden
- 2017
Ähnliche Objekte (12)
Optimal Trend Inflation
Optimal trend inflation
The optimal stability-oriented monetary policy: Optimal monetary policy under low trend inflation
Estimating the optimal inflation target from trends in relative prices
Monetary policy, trend inflation and inflation Persistence
Trend inflation in Sweden
Price Trends Over the Product Life Cycle and the Optimal Inflation Target
Price trends over the product life cycle and the optimal inflation target
Optimal trend inflation
Optimal trend inflation, misallocation and the pass-through of labour costs to prices
The macroeconomics of trend inflation
Optimal Horizons for Inflation Targeting
Optimal Trend Inflation
Optimal trend inflation
The optimal stability-oriented monetary policy: Optimal monetary policy under low trend inflation
Estimating the optimal inflation target from trends in relative prices
Monetary policy, trend inflation and inflation Persistence
Trend inflation in Sweden
Price Trends Over the Product Life Cycle and the Optimal Inflation Target
Price trends over the product life cycle and the optimal inflation target
Optimal trend inflation
Optimal trend inflation, misallocation and the pass-through of labour costs to prices
The macroeconomics of trend inflation
Optimal Horizons for Inflation Targeting
Optimal Trend Inflation
Optimal trend inflation
The optimal stability-oriented monetary policy: Optimal monetary policy under low trend inflation
Estimating the optimal inflation target from trends in relative prices
Monetary policy, trend inflation and inflation Persistence
Trend inflation in Sweden
Price Trends Over the Product Life Cycle and the Optimal Inflation Target
Price trends over the product life cycle and the optimal inflation target
Optimal trend inflation
Optimal trend inflation, misallocation and the pass-through of labour costs to prices
The macroeconomics of trend inflation