Economics at your fingertips  

Disinflationary shocks and inflation target uncertainty

Stefano Neri () and Tiziano Ropele ()

Economics Letters, 2019, vol. 181, issue C, 77-80

Abstract: In New Keynesian models favourable cost-push shocks lower inflation and increase output. Yet, when the central bank’s inflation target is not perfectly observed these shocks turn contractionary as agents erroneously perceive a temporary reduction in the target. This effect is amplified when monetary policy is constrained by the effective lower bound on the policy rate.

Keywords: Inflation target; Imperfect information; Monetary policy (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Disinflationary shocks and inflation target uncertainty (2019) Downloads
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:

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2020-01-02
Handle: RePEc:eee:ecolet:v:181:y:2019:i:c:p:77-80