Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?

We look to determine when interest rate-based stabilization plans should be gradual. We use a standard open economy DSGE model and consider three extensions that focus on the labor market. We find that gradualism is advised when sticky wages adjusted to past inflation generate inflationary inertia a...

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Autores principales: Arnoletto, Matías, Davi, Mariano, Zaratiegui, Emilio
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 2018
Materias:
Ciencias Económicas
inflation
stabilization
interest rates
small open economy
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/165492
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-165492
record_format dspace
spelling I19-R120-10915-1654922024-04-30T20:01:58Z http://sedici.unlp.edu.ar/handle/10915/165492 Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual? Arnoletto, Matías Davi, Mariano Zaratiegui, Emilio 2018-11 2018 2024-04-30T14:27:29Z en Ciencias Económicas inflation stabilization interest rates small open economy We look to determine when interest rate-based stabilization plans should be gradual. We use a standard open economy DSGE model and consider three extensions that focus on the labor market. We find that gradualism is advised when sticky wages adjusted to past inflation generate inflationary inertia and the policymaker is credible. On the contrary, when the policy-maker is not credible, a shock plan is more successful in lowering inflation. We contribute to the literature on stabilization plans that has mostly focused on exchange rate-based (ERBS) plans by extending the analysis to interest rate-based stabilization plans. Facultad de Ciencias Económicas Objeto de conferencia Objeto de conferencia http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) application/pdf
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
inflation
stabilization
interest rates
small open economy
spellingShingle Ciencias Económicas
inflation
stabilization
interest rates
small open economy
Arnoletto, Matías
Davi, Mariano
Zaratiegui, Emilio
Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
topic_facet Ciencias Económicas
inflation
stabilization
interest rates
small open economy
description We look to determine when interest rate-based stabilization plans should be gradual. We use a standard open economy DSGE model and consider three extensions that focus on the labor market. We find that gradualism is advised when sticky wages adjusted to past inflation generate inflationary inertia and the policymaker is credible. On the contrary, when the policy-maker is not credible, a shock plan is more successful in lowering inflation. We contribute to the literature on stabilization plans that has mostly focused on exchange rate-based (ERBS) plans by extending the analysis to interest rate-based stabilization plans.
format Objeto de conferencia
Objeto de conferencia
author Arnoletto, Matías
Davi, Mariano
Zaratiegui, Emilio
author_facet Arnoletto, Matías
Davi, Mariano
Zaratiegui, Emilio
author_sort Arnoletto, Matías
title Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
title_short Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
title_full Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
title_fullStr Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
title_full_unstemmed Go Slow to Go Far: When Should Inflation Stabilization Plans be Gradual?
title_sort go slow to go far: when should inflation stabilization plans be gradual?
publishDate 2018
url http://sedici.unlp.edu.ar/handle/10915/165492
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AT davimariano goslowtogofarwhenshouldinflationstabilizationplansbegradual
AT zaratieguiemilio goslowtogofarwhenshouldinflationstabilizationplansbegradual
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