Arbeitspapier

Average Inflation Targeting

The analysis of this paper demonstrates that when the Phillips curve has forward-looking components, a goal for average inflation - i.e. targeting a j-period average of one-period inflation rates - will cause inflation expectations to change in a way that improves the short-run trade-off faced by the monetary policymaker. Average inflation targeting is thus an example of a 'modified' loss function, which when implemented ina discretionary fashion results in more efficient outcomes from the standpoint of the true social objective (inflation targeting under commitment), than the discretionary pursuit of the true objective itself. In purely forward-looking models, average inflation targeting is dominated by price level targeting. But we also demonstrate that in models where the Phillips curve has both forward- and backward-looking components, there are cases when the average inflation target provides more efficient outcomes than both 'ordinary' one-period inflation targeting and price level targeting.

Sprache
Englisch

Erschienen in
Series: Sveriges Riksbank Working Paper Series ; No. 119

Klassifikation
Wirtschaft
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
Monetary Policy
Central Banks and Their Policies
Thema
Optimal monetary policy
Inflation targeting
Optimal delegation

Ereignis
Geistige Schöpfung
(wer)
Nessén, Marianne
Vestin, David
Ereignis
Veröffentlichung
(wer)
Sveriges Riksbank
(wo)
Stockholm
(wann)
2000

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Nessén, Marianne
  • Vestin, David
  • Sveriges Riksbank

Entstanden

  • 2000

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