Inflation Targeting as a Means of Achieving Disinflation

Christian Saborowski

No 271305, Economic Research Papers from University of Warwick - Department of Economics

Abstract: In this paper, we take an analytical approach to examine possible adverse effects of the use of inflation targeting as a disinflation regime. The idea is that a strict interpretation of an inflation target may preserve inflationary distortions after price stability is attained. We show that such a policy not only creates a slump in output but may increase macroeconomic volatility substantially in a model in which wages are subject to a Taylor staggering structure.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 48
Date: 2009-02
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Inflation targeting as a means of achieving disinflation (2010)
Working Paper: Inflation Targeting as a Means of Achieving Disinflation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:271305

DOI: 10.22004/ag.econ.271305

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