Temporary Acceleration of Inflation: What Can a Central Bank Learn from It?

Hilde Patron

Southern Economic Journal, 2005, vol. 71, issue 4, 737-751

Abstract: In this article I present a model in which the monetary authority conducts policy by setting money supply in the presence of uncertainty and Bayesian learning about the economic environment. I find that there exists a set of assumptions under which a temporary acceleration of money growth and thus of inflation increases the government's overall expected utility. There also exists a set of assumptions under which a temporary deceleration of money growth and thus of inflation increases the government's overall expected utility.

Date: 2005
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https://doi.org/10.1002/j.2325-8012.2005.tb00673.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:71:y:2005:i:4:p:737-751

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