| 来源类型 | Working Paper
|
| 规范类型 | 报告
|
| DOI | 10.3386/w16290
|
| 来源ID | Working Paper 16290
|
| Optimal Price Indices for Targeting Inflation Under Incomplete Markets |
| Rahul Anand; Eswar S. Prasad
|
| 发表日期 | 2010-08-19
|
| 出版年 | 2010
|
| 语种 | 英语
|
| 摘要 | In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. In this paper, we develop a two-sector two-good closed economy new Keynesian model to study the optimal choice of price index in markets with financial frictions. Financial frictions that limit credit-constrained consumers' access to financial markets make demand insensitive to interest rate fluctuations. The demand of credit-constrained consumers is determined by their real wage, which depends on prices in the flexible price sector. Thus, prices in the flexible price sector influence aggregate demand and, for monetary policy to have its desired effect, the central bank has to stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation is no longer equivalent to stabilizing output fluctuations. Our analysis suggests that in the presence of financial frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting--a target based on headline rather than core inflation, and with some weight on the output gap. We discuss why these results are particularly relevant for emerging markets, where the share of food expenditures in total consumption expenditures is high and a large proportion of consumers are credit-constrained. |
| 主题 | Macroeconomics
; Business Cycles
; Monetary Policy
; Fiscal Policy
|
| URL | https://www.nber.org/papers/w16290
|
| 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/573963
|
推荐引用方式
GB/T 7714 |
Rahul Anand,Eswar S. Prasad. Optimal Price Indices for Targeting Inflation Under Incomplete Markets. 2010.
|
|
文件名：
|
w16290.pdf
|
|
格式：
|
Adobe PDF
|
此文件暂不支持浏览
除非特别说明，本系统中所有内容都受版权保护，并保留所有权利。
