Optimal Inflation Target in an Economy with Menu Costs and a Zero Lower Bound

IF 6.3 1区 经济学 Q1 ECONOMICS
Andrés Blanco
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引用次数: 31

Abstract

I study the optimal inflation target in a quantitative menu cost model with a zero lower bound on interest rates. I find that the optimal inflation target is 3.5 percent, which is higher than in models commonly used for monetary policy analysis. Key to this result is that inflation has a small effect on resource misallocation when the model features firm-level shocks, which are necessary to match the empirical distribution of price changes. A higher inflation target decreases price flexibility at the zero lower bound, and through this mechanism, it reduces the severity of recessions when the monetary authority is constrained. (JEL E12, E31, E32, E42, E52)
具有菜单成本和下限为零的经济中的最优通胀目标
在利率下限为零的定量菜单成本模型中,我研究了最优通胀目标。我发现最理想的通胀目标是3.5%,这比通常用于货币政策分析的模型要高。这一结果的关键在于,当模型具有企业层面的冲击时,通货膨胀对资源错配的影响很小,而企业层面的冲击是匹配价格变化的经验分布所必需的。较高的通胀目标降低了零利率下限下的价格灵活性,通过这一机制,当货币当局受到约束时,它降低了衰退的严重程度。(凝胶e12, e31, e32, e42, e52)
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来源期刊
CiteScore
8.20
自引率
1.70%
发文量
58
期刊介绍: American Economic Journal: Macroeconomics focuses on studies of aggregate fluctuations and growth, and the role of policy in that context. Such studies often borrow from and interact with research in other fields, such as monetary theory, industrial organization, finance, labor economics, political economy, public finance, international economics, and development economics. To the extent that they make a contribution to macroeconomics, papers in these fields are also welcome.
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