Arbeitspapier
Adopting price-level targeting under imperfect credibility: An update
This paper measures the welfare gains of switching from inflation-targeting to price-level targeting under imperfect credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields higher welfare than inflation targeting. We revisit this issue by introducing imperfect credibility, which is modeled as gradual adjustment of the private sector's beliefs about the policy change. We find that gains from switching to pricelevel targeting are small. A welfare loss occurs, if imperfect credibility is highly persistent.
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Canada Working Paper ; No. 2008-37
- Classification
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Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
- Subject
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Credibility
Monetary policy framework
Geldpolitisches Ziel
Zentralbank
Inflation Targeting
Preisniveau
Glaubwürdigkeit
Wohlfahrtseffekt
Theorie
- Event
-
Geistige Schöpfung
- (who)
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Kryvtsov, Oleksiy
Shukayev, Malik
Ueberfeldt, Alexander
- Event
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Veröffentlichung
- (who)
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Bank of Canada
- (where)
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Ottawa
- (when)
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2008
- DOI
-
doi:10.34989/swp-2008-37
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kryvtsov, Oleksiy
- Shukayev, Malik
- Ueberfeldt, Alexander
- Bank of Canada
Time of origin
- 2008
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