Arbeitspapier
On robustness of average inflation targeting
This paper considers the performance of average inflation targeting (AIT) policy in a New Keynesian model with adaptive learning agents. Our analysis raises concerns regarding robustness of AIT when agents have imperfect knowledge. In particular, the target steady state can be locally unstable under learning if details about the policy are not publicly available. Near the low steady state with interest rates at the zero lower bound, AIT does not necessarily outperform a standard inflation targeting policy. Policymakers can improve outcomes under AIT by (i) targeting a discounted average of inflation, or (ii) communicating the data window for the target.
- Sprache
-
Englisch
- ISBN
-
978-952-323-373-7
- Erschienen in
-
Series: Bank of Finland Research Discussion Papers ; No. 6/2021
Klassifikation
Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
Central Banks and Their Policies
Price Level; Inflation; Deflation
Monetary Policy
Central Banks and Their Policies
Thema
Adaptive Learning
Inflation Targeting
Zero Interest Rate Lower Bound
Inflation Targeting
Zero Interest Rate Lower Bound
Ereignis
Geistige Schöpfung
(wer)
Honkapohja, Seppo
McClung, Nigel
McClung, Nigel
Ereignis
Veröffentlichung
(wer)
Bank of Finland
(wo)
Helsinki
(wann)
2021
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:24 MESZ
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.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Honkapohja, Seppo
- McClung, Nigel
- Bank of Finland
Entstanden
- 2021
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