Arbeitspapier
Labor-market frictions and optimal inflation
In central theories of monetary non-neutrality the Ramsey optimal inflation rate varies between the negative of the real interest rate and zero. This paper explores how the interaction of nominal wage and search and matching frictions affect the policy prescription. We show that adding the combination of such frictions to the canonical monetary model can generate an optimal inflation rate that is significantly positive. Specifically, for a standard U.S. calibration, we find a Ramsey optimal inflation rate of 1.11 percent per year.
- Language
-
Englisch
- Bibliographic citation
-
Series: Sveriges Riksbank Working Paper Series ; No. 259
- Classification
-
Wirtschaft
Monetary Policy
Taxation and Subsidies: Efficiency; Optimal Taxation
Mobility, Unemployment, Vacancies, and Immigrant Workers: General
- Subject
-
Optimal Monetary Policy
Inflation
Labor-market Distortions
Geldpolitik
Inflation
Lohntheorie
Arbeitsplatzsuchmodell
- Event
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Geistige Schöpfung
- (who)
-
Carlsson, Mikael
Westermark, Andreas
- Event
-
Veröffentlichung
- (who)
-
Sveriges Riksbank
- (where)
-
Stockholm
- (when)
-
2012
- Handle
- Last update
-
10.03.2025, 11:46 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
- Carlsson, Mikael
- Westermark, Andreas
- Sveriges Riksbank
Time of origin
- 2012
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