Efficiency and determinacy of equilibrium under inflation targeting
type: Item
instance of: scholarly article
title: Efficiency and determinacy of equilibrium under inflation targeting
zbMATH Open document ID: 0813.90033
DOI: 10.1007/BF01215376
author: Bruce D. Smith
published in: Economic Theory
publication date: 1995-01-05T00:00:00Z
review text: There is increasing interest in conducting monetary policy so as to achieve a given target inflation rate (or price level path). Several policies that have been advocated for this purpose are evaluated on the following criteria: (a) are they consistent with the existence of an equilibrium for a variety of targets? (b) do they support only equilibria with the desired price level behavior, or are other equilibria also possible? (c) even if only the desired price level path is possible, are indeterminacies avoided on other dimensions? (d) if there is a unique equilibrium, does it support an allocation that can be Pareto dominated in equilibrium by an alternative policy mechanism? None of the policies examined performs well on the basis of all these criteria.
Mathematics Subject Classification ID: 91B64
Mathematics Subject Classification ID: 91B50
zbMATH DE Number: 707350
zbMATH Keywords: monetary policy
zbMATH Keywords: target inflation rate
MaRDI profile type: Publication
cites work: Self-fulfilling prophecies
cites work: Q3265896
cites work: Monetary policy and price level determinacy in a cash-in-advance economy
full work available at URL: https://doi.org/10.1007/bf01215376
OpenAlex ID: W2074652975
description: scientific article; zbMATH DE number 707350