Sustainability, flexibility, and inflation targeting

Takushi Kurozumi

Economics Letters, 2012, vol. 114, issue 1, 80-82

Abstract: This paper examines sustainability of an inflation-targeting policy regime in terms of sustainable equilibrium using a canonical model in the recent literature. Overly flexible inflation targeting is not sustainable. Strict inflation targeting is sustainable only when shock persistence is high enough.

Keywords: Inflation targeting; Flexibility; Sustainable equilibrium (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:114:y:2012:i:1:p:80-82

DOI: 10.1016/j.econlet.2011.09.020

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