Output Effects of Disinflation with Staggered Price Setting

John Carlson

Southern Economic Journal, 2002, vol. 68, issue 4, 947-956

Abstract: A discrete‐time model with staggered price setting is shown to be flexible enough to analyze a variety of scenarios in which policymakers may introduce disinflation. While a recession need not necessarily occur, a semicredible disinflation (i.e., when price setters believe a new lower money growth rate will continue but do not act on future reductions) unambiguously depresses output with staggered prices, no matter how rapidly or slowly the disinflation is introduced.

Date: 2002
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https://doi.org/10.1002/j.2325-8012.2002.tb00468.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:68:y:2002:i:4:p:947-956

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