Sustainable Monetary Policy and Inflation Expectations

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Preprint 01 Jan 2010 English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Roc Armenter;

doi: 10.2139/ssrn.1622829 , 10.1515/bejm-2014-0166

Sustainable Monetary Policy and Inflation Expectations

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Abstract

AbstractThe short-term nominal interest rate can anchor private-sector expectations into low inflation – more precisely, into the best equilibrium reputation can sustain. I introduce nominal asset markets in an infinite horizon version of the Barro-Gordon model and characterize the subset of sustainable policies compatible with any given asset price system at date

Related Organizations

Federal Reserve Bank of Philadelphia
United States

Keywords

Inflation (Finance) ; Interest rates ; Asset pricing

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