Inflation-targeting, price-path targeting and indeterminacy

Robert Dittmar and William Gavin ()

No 2004-007, Working Papers from Federal Reserve Bank of St. Louis

Abstract: In this paper, we examine the areas of indeterminacy in a flexible price RBC model with shopping time role for money and a central bank that uses an interest rate rule to target inflation and/or the price level. We present analytical results showing that, although inflation targeting often results in real indeterminacy, a price level target generally delivers a unique equilibrium for a relevant range of policy parameters.

Keywords: Monetary policy; Equilibrium (Economics) (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Economics Letters, September 2005, 88(3), pp. 336-42

Downloads: (external link)
https://s3.amazonaws.com/real.stlouisfed.org/wp/2004/2004-007.pdf Full text (application/pdf)

Related works:
Journal Article: Inflation-targeting, price-path targeting and indeterminacy (2005)
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:fip:fedlwp:2004-007

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2004.007

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().