Monetary policy,heterogeneous population and inflation |
| |
Authors: | Nurlan Turdaliev |
| |
Affiliation: | Department of Economics, University of Windsor, 401 Sunset Avenue, Windsor, Ontario N9B 3P4, Canada |
| |
Abstract: | Adding heterogeneity to an otherwise simple model results in a deviation from the Friedman rule. We show that a central bank concerned with inequality delivers an outcome below the Pareto frontier. Our results may shed light as to why central banks around the world do not follow the Friedman rule and instead deliver positive inflation rates. On the other hand, the calibrated model indicates that the implied optimal inflation rates are much higher than those observed in the data. One possible interpretation of our results is to question the recent wisdom of thinking of inequality as part of central banks’ concerns. |
| |
Keywords: | Monetary policy Heterogeneity Central bank Inequality Inflation Ramsey policy E31 E52 E58, |
本文献已被 ScienceDirect 等数据库收录! |
|