Inflation Targeting as a Means of Achieving Disinflation

Christian Saborowski
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Christian Saborowski: University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: In this paper, we take an analytical approach to examine possible adverse effects of the use of inflation targeting as a disinflation regime. The idea is that a strict interpretation of an inflation target may preserve inflationary distortions after price stability is attained. We show that such a policy not only creates a slump in output but may increase macroeconomic volatility substantially in a model in which wages are subject to a Taylor staggering structure.

Keywords: Disinflation; Inflation Targeting; Wage Staggering (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2009
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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https://warwick.ac.uk/fac/soc/economics/research/w ... s/2009/twerp_894.pdf

Related works:
Journal Article: Inflation targeting as a means of achieving disinflation (2010)
Working Paper: Inflation Targeting as a Means of Achieving Disinflation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:894

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