| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP2186 |
| DP2186 Social Conflict and Growth in Euroland | |
| Paul De Grauwe; Frauke Skudelny | |
| 发表日期 | 1999-07-26 |
| 出版年 | 1999 |
| 语种 | 英语 |
| 摘要 | A stylised fact of monetary policy making is that central banks do not immediately respond to new information but rather seem to prefer to wait until sufficient 'evidence' to warrant a change has accumulated. However, theoretical models of inflation targeting imply that an optimising central bank should continuously respond to shocks. This paper attempts to explain this stylised fact by introducing a small menu cost which is incurred every time the central bank changes the interest rate. It is shown that this produces a relatively large range of inaction because this cost will induce the central bank to take the option value of the status quo into account. In other words, because action is costly the central bank will have an incentive to wait and see whether or not the economy will move closer to the inflation target of its own accord. Next, the paper analyses the implications for the time series properties of interest rates. In particular, we examine the effect of the interest rate sensitivity of aggregate demand, the slope of the Lucas supply function and the variance of demand shocks on the size of the interest rate step and the expected length of the time period till the next interest rate step. Finally, we analyse the effect of menu costs on inflationary expectations. In this respect we find that the economy will suffer from an inflationary bias if the cost of raising the interest rate exceeds the cost of lowering it. |
| 主题 | International Macroeconomics |
| 关键词 | Dynamic menu costs Inflation targeting Uncertainty |
| URL | https://cepr.org/publications/dp2186 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/531293 |
| 推荐引用方式 GB/T 7714 | Paul De Grauwe,Frauke Skudelny. DP2186 Social Conflict and Growth in Euroland. 1999. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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