Resource title

A quantitative exploration of the opportunistic approach to disinflation

Resource image

image for OpenScout resource :: A quantitative exploration of the opportunistic approach to disinflation

Resource description

Under a conventional policy rule, a central bank adjusts its policy rate linearly according to the gap between inflation and its target, and the gap between output and its potential. Under the opportunistic approach to disinflation a central bank controls inflation aggressively when inflation is far from its target, but concentrates more on output stabilization when inflation is close to its target, allowing supply shocks and unforeseen fluctuations in aggregate demand to move inflation within a certain band. We use stochastic simulations of a smallscale rational expectations model to contrast the behavior of output and inflation under opportunistic and linear rules.

Resource author

Yunus Aksoy, Athanasios Orphanides, David Small, Volker Wieland

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25459

Resource license

Adapt according to the presented license agreement and reference the original author.