| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP14142 |
| DP14142 Raising the Inflation Target: How Much Extra Room Does It Really Give? | |
| Jean-Paul L'Huillier; Raphael Schoenle | |
| 发表日期 | 2019-11-20 |
| 出版年 | 2019 |
| 语种 | 英语 |
| 摘要 | Less than intended. Therefore, in order to get, say, 2 pp. of extra room for monetary policy, the target needs to be raised to more than 4%. In this paper, we investigate the constraints on a policy aimed at achieving more monetary policy room by raising the inflation target. A theoretical analysis shows that the actual effective room gained when raising the target is always smaller than the intended room. The reason is a shift in the behavior of the private sector: Prices adjust more frequently, lowering the potency of monetary policy. We derive a simple formula for the effective gain expressed in terms of the potency of monetary policy. We then quantitatively investigate this channel across different models, based on a calibration using micro data. We find that, by raising the target to 4%, the monetary authority only gains between 0.51 and 1.60 percentage points (pp.) of policy room (not 2 pp. as intended). In order to achieve 2 pp. additional policy room, the target needs to be raised to approximately 5%. The quantitative models allow to derive the Bayesian distribution of the effective room under parameter uncertainty. |
| 主题 | Monetary Economics and Fluctuations |
| 关键词 | Timidity trap Zero lower bound Liquidity traps Central bank design Inflation targeting Lucas proof Price stability |
| URL | https://cepr.org/publications/dp14142 |
| 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/543030 |
| 推荐引用方式 GB/T 7714 | Jean-Paul L'Huillier,Raphael Schoenle. DP14142 Raising the Inflation Target: How Much Extra Room Does It Really Give?. 2019. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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