Opportunistic Monetary Policy: an Alternative Rationalization

A. Patrick L. 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)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2005-12
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Published in Journal of Economics and Business, 58, October-November 2006, pp. 366-372

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Related works:
Journal Article: Opportunistic monetary policy: An alternative rationalization (2006)
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