INFLATION TARGET ZONES AS A COMMITMENT MECHANISM

Felipe F. Schwartzman

Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: In a simple new keyenesian model of monetary policy under discretion constraining the Central Bank to put inflation within a pre-specified Inflation Target Zone can eliminate the inflation bias and, at least for certain parameter ranges, significantly reduce the stabilization bias. Also, it is possible to investigate what is the optimal Inflation Target Zone for different economies. These seem to depend of the structural parameters in a non-linear and often non-monotonic way.

JEL-codes: E42 E52 E61 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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http://www.anpec.org.br/encontro2005/artigos/A05A038.pdf

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Journal Article: Inflation Target Zones as a Commitment Mechanism (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:anp:en2005:038

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