| 来源类型 | Discussion paper
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| 规范类型 | 论文
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| 来源ID | DP11320
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| DP11320 INFLATION TARGETS AND THE ZERO LOWER BOUND IN A BEHAVIORAL MACROECONOMIC MODEL |
| Paul De Grauwe; Yuemei Ji
|
| 发表日期 | 2016-06-10
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| 出版年 | 2016
|
| 语种 | 英语
|
| 摘要 | We analyze the relation between the level of the inflation target and the zero lower bound (ZLB) imposed on the nominal interest rate. We analyze this relation in the framework of a behavioral macroeconomic model in which agents experience cognitive limitations. The model produces endogenous waves of optimism and pessimism (animal spirits) that, because of their self-fulfilling nature, drive the business cycle and in turn are influenced by the business cycle. We find that when the inflation target is too close to zero, the economy can get gripped by “chronic pessimism” that leads to a dominance of negative output gaps and recessions, and in turn feeds back on expectations producing long waves of pessimism.
The simulations of our model, using parameter calibrations that are generally found in the literature, suggests that an inflation target of 2% is too low, i.e. produces negative skewness in the distribution of the output gap. We find that an inflation target in the range of 3% to 4% comes closer to producing a symmetric distribution of the output gap and avoids the economy being trapped in a region of chronic pessimism. |
| 主题 | Monetary Economics and Fluctuations
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| 关键词 | Zero lower bound
Inflation targeting
Behavioral macroeconomics
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| URL | https://cepr.org/publications/dp11320
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/540136
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推荐引用方式
GB/T 7714 |
Paul De Grauwe,Yuemei Ji. DP11320 INFLATION TARGETS AND THE ZERO LOWER BOUND IN A BEHAVIORAL MACROECONOMIC MODEL. 2016.
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