Arbeitspapier
Monetary policy with a state-dependent inflation target in a behavioral two-country monetary union model
In this paper we study the implementation of a state-dependent inflation target in a two-country monetary union model characterized by boundedly rational agents. In particular, we use the spread between the actual policy rate (which is constrained by the zero-lower-bound) and the Taylor rate (which can become negative) as a measure for the degree of ineffectiveness of conventional monetary policy as a stabilizing mechanism. The perception of macroeconomic risk by the agents is assumed to vary according to this measure by means of the Brock-Hommes switching mechanism. Our numerical simulations indicate a) that a state-dependent inflation target may lead to a better macroeconomic and inflation stabilization, and b) the perceived risk-sharing among the monetary union members influences the financing conditions of the member economies of the monetary union.
- ISBN
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978-3-943153-82-8
- Sprache
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Englisch
- Erschienen in
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Series: BERG Working Paper Series ; No. 161
- Klassifikation
-
Wirtschaft
Monetary Policy
International Economic Order and Integration
- Thema
-
Monetary Policy
Monetary Unions
Zero Lower Bound
Inflation Targets
Behavioral Macroeconomics
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Proaño Acosta, Christian
Lojak, Benjamin
- Ereignis
-
Veröffentlichung
- (wer)
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Bamberg University, Bamberg Economic Research Group (BERG)
- (wo)
-
Bamberg
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Proaño Acosta, Christian
- Lojak, Benjamin
- Bamberg University, Bamberg Economic Research Group (BERG)
Entstanden
- 2020
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