Opportunistic Monetary Policy: an Alternative Rationalization

A. Patrick Minford and Naveen Srinivasan

No E2005/9, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper offers an alternative rationalization for opportunistic behaviour i.e., a gradual disinflation strategy where policymakers react asymmetrically to supply shocks, opting to disinflate only in recessionary period. Specifically, we show that adaptive expectations combined with asymmetry in the Phillips curve of a specific sort together provide an optimizing justification for opportunism. However, the empirical basis for these conditions to be satisfied in the current low-inflation context of most OECD countries remains however to be established.

Keywords: Deliberate disinflation; Opportunistic disinflation (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-12
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Economics and Business , 58 , October-November 2006, pp. 366-372

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Journal Article: Opportunistic monetary policy: An alternative rationalization (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2005/9

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