Economics at your fingertips  

Relative Price Changes and the Optimal Inflation Rate

Alexander Wolman ()

Economic Quarterly, 2015, issue 3Q, 245-274

Abstract: Relative prices of some goods or sectors have long-run trends: For example, the price of services relative to goods has been rising fairly steadily for decades. Other relative prices do not have long-run trends but sometimes fluctuate dramatically from one period to the next. How should monetary policy behave in the face of these trends and fluctuations? I use a model with costly price adjustment to study the optimal rate of inflation when there are trends in relative prices and to construct hypothetical U.S. inflation rates that would have minimized the costs of price adjustment implied by the model.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... 15/q3/pdf/wolman.pdf Full text (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:

Ordering information: This journal article can be ordered from

DOI: 10.21144/eq1010303

Access Statistics for this article

More articles in Economic Quarterly from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().

Page updated 2019-07-22
Handle: RePEc:fip:fedreq:00035