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Title: |
Conservative Monetary Policy Rule and
Inflation Mitigation Policies |
| Author: |
Whang, Seong
Hyeon |
| Author
Affiliation: |
U Inchon |
| Source: |
International Economic Journal, Autumn 2000, v. 14, no. 3, pp. 63-74 |
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Publication Date: |
Autumn 2000 |
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Abstract: |
This paper studies an enforceable
conservative monetary policy rule and the welfare implications of
inflation mitigation policies. By applying Rogoff's idea of appointing a
conservative central banker to Barro and Gordon's framework, we derive
the optimal degree of conservatism of society when the policy rule is
enforceable in a multi-period set-up. In our work, the exact range of
the parameter used to measure the degree of conservatism for the
enforceable policy rule is expressed by some important parameters in the
model such as the marginal cost of inflation, the slope coefficient in
the Phillips curve, and the time discount factor. Using the basic
set-up, we re-investigate Fischer and Summers' finding on the welfare
effects of some inflation mitigation policies for the case of the
reputational equilibrium under the conservative monetary policy rule. |
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