Average inflation targeting in Calvo model with imperfect knowledge and learning

Seppo Honkapohja and Nigel McClung

No 13/2024, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: Properties of average inflation targeting under imperfect knowledge and learning have been studied only for the Rotemberg NK model, where price stickiness arises from adjustment costs in price setting. This note fills the gap by studying average inflation targeting in the NK model with Calvo price stickiness. It is shown that in this setting the two models have the same basic properties, unless the central bank aggressively stabilizes output instead of average inflation.

Date: 2024
New Economics Papers: this item is included in nep-cba, nep-knm and nep-mon
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/306369/1/190899925X.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:306369

Access Statistics for this paper

More papers in Bank of Finland Research Discussion Papers from Bank of Finland Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().