Second-order approximation to the Rotemberg model around a distorted steady state

Tatiana Damjanovic; Charles Nolan

doi:doi:10.1016/j.econlet.2010.11.010

Second-order approximation to the Rotemberg model around a distorted steady state

Tatiana Damjanovic, Charles Nolan

Research output: Contribution to journal › Article › peer-review

Abstract

Social welfare objectives are investigated when changing prices is costly (Rotemberg, 1982). A quadratic welfare function is derived, with distorted steady state, implying inflation and output stabilization goals. Economic distortions influence inflation aversion in a way that differs from Calvo models.

Original language	English
Pages (from-to)	132-135
Number of pages	4
Journal	Economics Letters
Volume	110
Issue number	2
Early online date	13 Dec 2010
DOIs	https://doi.org/doi:10.1016/j.econlet.2010.11.010
Publication status	Published - Feb 2011
Event	Royal Economic Society 2010 - Surrey, United Kingdom Duration: 18 Apr 2010 → 20 Apr 2010

Keywords

Calvo vs Rotemberg. Distorted steady state.

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Y2 - 18 April 2010 through 20 April 2010

ER -

Second-order approximation to the Rotemberg model around a distorted steady state

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Keywords

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