Models of Inflation and the Costs of Disinflation
Paul Masson () and
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Bankim Chadha: International Monetary Fund
Guy Meredith: International Monetary Fund
IMF Staff Papers, 1992, vol. 39, issue 2, 395-431
The focus of this analysis is on the output costs of disinflation. A model of inflation with both forward and backward elements seems to characterize reality. Such an inflation model is estimated using data for industrial countries, and the output costs of a disinflation path are calculated, first analytically in a simple theoretical model, then by a simulation of a global, multiregion empirical model. The credibility of a preannounced path for money consistent with the lowest output loss is considered. An alternative, more credible policy may be to announce an exchange rate peg to a low-inflation currency.
JEL-codes: E31 E52 (search for similar items in EconPapers)
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Chapter: Models of Inflation and the Costs of Disinflation (2019)
Working Paper: Models of Inflation and the Costs of Disinflation (1991)
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Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:39:y:1992:i:2:p:395-431
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