Models of Inflation and the Costs of Disinflation

Bankim Chadha, Paul Masson and Guy Meredith

Chapter 3 in Macroeconomic Modelling and Monetary and Exchange Rate Regimes, 2019, pp 57-99 from World Scientific Publishing Co. Pte. Ltd.

Abstract: 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.

Keywords: Exchange Rates; Modelling; Monetary Unions; Inflation Targeting (search for similar items in EconPapers)
JEL-codes: F45 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789811201721_0003 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789811201721_0003 (text/html)
Ebook Access is available upon purchase.

Related works:
Journal Article: Models of Inflation and the Costs of Disinflation (1992)
Working Paper: Models of Inflation and the Costs of Disinflation (1991)
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: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811201721_0003

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().