| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w9929 |
| 来源ID | Working Paper 9929 |
| Monetary Discretion, Pricing Complementarity and Dynamic Multiple Equilibria | |
| Robert G. King; Alexander L. Wolman | |
| 发表日期 | 2003-08-25 |
| 出版年 | 2003 |
| 语种 | 英语 |
| 摘要 | In a plain-vanilla New Keynesian model with two-period staggered price-setting, discretionary monetary policy leads to multiple equilibria. Complementarity between the pricing decisions of forward-looking firms underlies the multiplicity, which is intrinsically dynamic in nature. At each point in time, the discretionary monetary authority optimally accommodates the level of predetermined prices when setting the money supply because it is concerned solely about real activity. Hence, if other firms set a high price in the current period, an individual firm will optimally choose a high price because it knows that the monetary authority next period will accommodate with a high money supply. Under commitment, the mechanism generating complementarity is absent: the monetary authority commits not to respond to future predetermined prices. We compute a traditional inflation bias equilibrium, in which price-setters are optimistic, rationally expecting small adjustments by other firms. But there is another steady-state equilibrium in which price setters are pessimistic and inflation is much higher. Further, we find that there are multiple equilibria at a point in time, not just in steady states. In a stochastic setting with equilibrium selection each period determined by an i.i.d. sunspot, there is greater inflation bias on average than if price-setters were always optimistic. The sunspot realization also has real effects: periods of higher than average inflation are accompanied by low output. Thus, increased real volatility may be an additional cost of discretion in monetary policy. |
| 主题 | Macroeconomics ; Monetary Policy ; Fiscal Policy |
| URL | https://www.nber.org/papers/w9929 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/567554 |
| 推荐引用方式 GB/T 7714 | Robert G. King,Alexander L. Wolman. Monetary Discretion, Pricing Complementarity and Dynamic Multiple Equilibria. 2003. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w9929.pdf（604KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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