TY - JOUR
T1 - A Quantitative Analysis of Cost-Push Shocks and Optimal Inflation Volatility
AU - Senay, Ozge
AU - Sutherland, Alan
N1 - 03/09/09: Changed from "Internet publication" to "Journal Article".
PY - 2008/8
Y1 - 2008/8
N2 - This article presents a quantitative analysis of optimal inflation volatility in a simple sticky-price general equilibrium model subject to both supply and cost-push shocks. It is found that optimal policy implies a relatively small degree of inflation volatility even when cost-push shocks are the dominant source of economic disturbance. In addition, it is found that optimal policy generates only a very small welfare gain when compared to strict inflation targeting.
AB - This article presents a quantitative analysis of optimal inflation volatility in a simple sticky-price general equilibrium model subject to both supply and cost-push shocks. It is found that optimal policy implies a relatively small degree of inflation volatility even when cost-push shocks are the dominant source of economic disturbance. In addition, it is found that optimal policy generates only a very small welfare gain when compared to strict inflation targeting.
UR - http://www.scopus.com/inward/record.url?scp=48749087333&partnerID=8YFLogxK
UR - http://www.informaworld.com/smpp/content~content=a783006788
U2 - 10.1080/13504850600770954
DO - 10.1080/13504850600770954
M3 - Article
SN - 1350-4851
VL - 15
SP - 753
EP - 757
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 10
ER -