scholarly journals The Need for an Inflation Buffer in the Ecb's Price Stability Objective – the Role of Nominal Rigidities and Inflation Differentials

2021 ◽  
Author(s):  
Agostino Consolo ◽  
Gerrit B. Koester ◽  
Christiane Nickel ◽  
Mario Porqueddu ◽  
Frank Smets
Keyword(s):  
Price Stability ◽  
Nominal Rigidities ◽  
Inflation Differentials

scholarly journals U.S. TREND INFLATION REINTERPRETED: THE ROLE OF FISCAL POLICIES AND TIME-VARYING NOMINAL RIGIDITIES

2014 ◽  
Vol 19 (6) ◽  
pp. 1294-1308 ◽  
Author(s):  
Nicola Acocella ◽  
Giovanni Di Bartolomeo ◽  
Patrizio Tirelli
Keyword(s):  
Strong Impact ◽  
Fiscal Policies ◽  
Time Varying ◽  
Nominal Rigidities ◽  
Distortionary Taxation ◽  
Trend Inflation ◽  
Wage Indexation ◽  
Joint Evolution

This paper offers a reinterpretation of the Fed's time-varying implicit inflation target, based on two considerations. The first is that the need to alleviate the burden of distortionary taxation may justify the choice of a positive inflation rate. The second is based on compelling evidence that the degree of price and wage indexation falls with trend inflation. In fact, we find that a proper characterization of the joint evolution of fiscal variables and nominal rigidities has a strong impact on the Ramsey optimal policies, implying optimal inflation dynamics that are consistent with the observed evolution of U.S. trend inflation. By contrast, tax policies have been too lax, especially at the time of the controversial Bush tax cuts.

The Rôle of International Organizations in Promoting Price Stability

Inflation ◽  
1962 ◽  
pp. 293-303
Author(s):  
Hans Möller
Keyword(s):  
International Organizations ◽  
Price Stability

scholarly journals The Exchange Rate Pass -Through to Import and Export Prices: The Role of Nominal Rigidities and Currency Choice

2012 ◽  
Vol 12 (226) ◽  
pp. i ◽  
Author(s):  
Ehsan U. Choudhri ◽  
Dalia Hakura ◽  
◽  
Keyword(s):  
Exchange Rate ◽  
Nominal Rigidities ◽  
Export Prices ◽  
Import And Export ◽  
The Exchange Rate ◽  
Pass Through ◽  
Exchange Rate Pass Through

scholarly journals Adopting Inflation Targeting in Pakistan: An Empirical Analysis

2010 ◽  
Vol 15 (2) ◽  
pp. 51-76 ◽  
Author(s):  
Nadia Saleem
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Inflation Rate ◽  
Policy Option ◽  
Price Stability ◽  
Potential Candidate ◽  
Long Run ◽  
The Interest Rate ◽  
Nominal Anchor

The objective of this paper is to assess the conditions for inflation targeting in Pakistan. The recent inflationary surge in Pakistan calls for rethinking monetary policy afresh. This paper argues the case for inflation targeting in Pakistan as a policy option to achieve price stability. The country experienced an inflation rate of just below 10 percent during 1970-2009, which makes it a potential candidate for inflation targeting. Applying the VAR technique to data for the same period, inflation is shown to be adaptive in nature, leading us to reject the accelerationist hypothesis. The Lucas critique holds as people are found to use forward-looking models in forming expectations about inflation. The paper also sheds some light on the State Bank of Pakistan’s level of preparedness for the possibility of adopting inflation targeting, for which transparency and autonomy are prerequisites. The interest rate channel can play the role of a nominal anchor in the long run.

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