Arbeitspapier
The optimal inflation buffer with a zero bound on nominal interest rates
This paper characterizes the optimal inflation buffer consistent with a zero lower bound on nominal interest rates in a New Keynesian sticky-price model. It is shown that a purely forward-looking version of the model that abstracts from inflation inertia would significantly underestimate the inflation buffer. If the central bank follows the prescriptions of a welfaretheoretic objective, a larger buffer appears optimal than would be the case employing a traditional loss function. Taking also into account potential downward nominal rigidities in the price-setting behavior of firms appears not to impose significant further distortions on the economy.
- Sprache
-
Englisch
- Erschienen in
-
Series: CFS Working Paper ; No. 2005/17
- Klassifikation
-
Wirtschaft
Computational Techniques; Simulation Modeling
Price Level; Inflation; Deflation
Monetary Policy
- Thema
-
Inflation Inertia
Downward Nominal Rigidity
Nonlinear Policy
Liquidity Trap
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Billi, Roberto M.
- Ereignis
-
Veröffentlichung
- (wer)
-
Goethe University Frankfurt, Center for Financial Studies (CFS)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2004
- Handle
- URN
-
urn:nbn:de:hebis:30-10932
- Letzte Aktualisierung
-
10.03.2025, 11:42 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.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Billi, Roberto M.
- Goethe University Frankfurt, Center for Financial Studies (CFS)
Entstanden
- 2004
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