Recession Aversion, Output and the Kydland-Prescott Barro-Gordon Model

Stefan Gerlach ()

No 3687, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper explores the relationship between the Kydland-Prescott Barro-Gordon model and models with asymmetric policy preferences. While both yield an inflation bias, recession aversion dampens the output effects of contractionary supply shocks. Some inflation may therefore reflect policy preferences.

Keywords: Asymmetric policy reactions; Inflation bias; Reaction functions (search for similar items in EconPapers)
JEL-codes: E31 E50 (search for similar items in EconPapers)
Date: 2003-01
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (22)

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Journal Article: Recession aversion, output and the Kydland-Prescott Barro-Gordon model (2003)
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