Downward nominal rigidity and monetary policy

Anthony Yates ()

Bank of England working papers from Bank of England

Abstract: This paper addresses the question of whether there is downward rigidity in money wages and prices. It is an issue that is relevant to the choice of the level of the inflation target, as it has been argued that targeting too low a level of inflation will be harmful when downward rigidities exist. The existence of such rigidities is questioned from a theoretical perspective on the basis of the very strict conditions that would have to apply. Also it is argued that concern for 'fairness' or the presence of 'money illusion' do not in themselves justify positive inflation. Empirical evidence is investigated and it is found that the existence of downward rigidities is not proven.

Date: 1998-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://www.bankofengland.co.uk/archive/Documents/h ... papers/1998/wp82.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1998/wp82.pdf [301 Moved Permanently]--> https://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1998/wp82.pdf)

Related works:
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:boe:boeewp:82

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England Bank of England, Threadneedle Street, London, EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Digital Media Team ().