Opportunistic and deliberate disinflation under imperfect credibility

Antulio Bomfim and Glenn Rudebusch

No 1998-01, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: One strategy for disinflation prescribes a deliberate path towards low inflation. A contrasting opportunistic approach eschews deliberate action and instead waits for unforeseen shocks to reduce inflation. This paper compares the ability of these two approaches to achieve disinflation---and at what cost. We analyze these issues using the Federal Reserve's FRB/US model, which allows alternative assumptions to be made about expectations held by agents in the economy; hence, the credibility of the central bank can be considered in assessing the cost of deliberate and opportunistic disinflations.

Keywords: Inflation; (Finance) (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Opportunistic and Deliberate Disinflation under Imperfect Credibility (2000)
Working Paper: Opportunistic and deliberate disinflation under imperfect credibility (1997)
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