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Inflation variability between central bank's preferences and the structure of the economy: A note

Osama Sweidan ()

Economic Modelling, 2011, vol. 28, issue 1-2, 630-636

Abstract: The current paper seeks to build a theoretical explanation to understand why many central banks failed to reduce inflation variability despite having the desire. The result proves that central bank's preferences are a necessary condition but not sufficient to guarantee lower inflation variability. The structure of the economy and the types of the shocks are significant factors.

Keywords: Inflation; variability; Quadratic; loss; function; Asymmetric; loss; function; Central; banks (search for similar items in EconPapers)
Date: 2011
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