Monetary policy and core inflation

Arbeitspapier

This paper studies optimal monetary policy responses in an economy featuring sectorial heterogeneity in the frequency of price adjustments. It shows that a central bank facing heterogeneous nominal rigidities is more likely to behave less aggressively than in a fully sticky economy. Hence, the supposedly excessive caution in the conduct of monetary policy shown by central banks could be partly explained by the existence of a relevant sectorial dispersion in the frequency of price adjustments.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 837

Classification and Topics

• Classification: Wirtschaft ; Interest Rates: Determination, Term Structure, and Effects ; Monetary Policy ; Central Banks and Their Policies
• Subject: core inflation ; elasticity of intertemporal substitution ; heterogeneity ; nominal rigidity ; Geldpolitik ; Kerninflation ; Preisstreuung ; Branche ; Preisrigidität ; Substitutionselastizität ; Intertemporale Entscheidung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lenza, Michele
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/153271
• Last update: 10.03.2025, 11:46 AM CET