Disinflation in a DSGE perspective: sacrifice ratio or welfare gain ratio?

Guido Ascari and Tiziano Ropele

No 1499, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: When taken to examine disinflation monetary policies, the current workhorse DSGE model of business cycle fluctuations successfully accounts for the main stylized facts in terms of recessionary effects and sacrifice ratio. We complement the transitional analysis of the short-run costs with a rigorous welfare evaluation and show that, despite the long-lasting economic downturn, disinflation entails non-zero overall welfare gains.

Keywords: Disinflation; Sacrifice ratio; Non-linearities (search for similar items in EconPapers)
JEL-codes: E31 E5 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Disinflation in a DSGE perspective: Sacrifice ratio or welfare gain ratio? (2012)
Working Paper: Disinflation in a DSGE Perspective: Sacrifice Ratio or Welfare Gain Ratio? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1499

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