Sacrifice ratio or welfare gain ratio? Disinflation in a DSGE monetary model

Guido Ascari and Tiziano Ropele

No 736, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: When taken to examine disinflation monetary policies, the current workhorse DSGE model of business cycle fluctuations successfully accounts for the main stylized facts in terms of recessionary effects and sacrifice ratio. We complement the transitional analysis of the short-run costs with a rigorous welfare evaluation and show that, despite the long-lasting economic downturn, disinflation entails non-zero overall welfare gains.

Keywords: disinflation; sacrifice ratio; non-linearities (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Sacrifice Ratio or Welfare Gain Ratio? Disinflation in a DGSE monetary model (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_736_10

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