Arbeitspapier
On the Non-Optimality of Information: An Analysis of the Welfare Effects of Anticipated Shocks in the New Keynesian Model
This paper compares the welfare effects of anticipated and unanticipated cost-push shocks in the canonical New Keynesian model with optimal monetary policy. We find that, for empirically plausible degrees of nominal rigidity, the anticipation of a future cost-push shock leads to a higher welfare loss than an unanticipated shock. A welfare gain from the anticipation of a future cost shock may only occur if prices are sufficiently flexible. We analytically show that this surprising result holds although unanticipated shocks lead to higher negative impact effects on welfare than anticipated shocks.
- Language
-
Englisch
- Bibliographic citation
-
Series: Economics Working Paper ; No. 2008-21
- Classification
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Wirtschaft
Monetary Policy
Business Fluctuations; Cycles
Price Level; Inflation; Deflation
- Subject
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Anticipated Shocks
Optimal Monetary Policy
Sticky Prices
Welfare Analysis
Kosten
Schock
Erwartungstheorie
Geldpolitik
Preisrigidität
Wohlfahrtseffekt
Theorie
- Event
-
Geistige Schöpfung
- (who)
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Wohltmann, Hans-Werner
Winkler, Roland C.
- Event
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Veröffentlichung
- (who)
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Kiel University, Department of Economics
- (where)
-
Kiel
- (when)
-
2008
- Handle
- Last update
-
10.03.2025, 11:45 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
- Wohltmann, Hans-Werner
- Winkler, Roland C.
- Kiel University, Department of Economics
Time of origin
- 2008
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