Inflation and price level targeting in a New Keynesian model

Chadha, J. S. and Nolan, C. (2002) Inflation and price level targeting in a New Keynesian model. Manchester School, 70(4), pp. 570-595. (doi: 10.1111/1467-9957.00301)

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Abstract

n a New Keynesian macroeconomic model under credible commitment, price level targeting dominates inflation targeting. But with sufficient inflation aversion the inflation–targeting central bank can produce quantitatively similar results to one targeting the price level. The current degree of inflation aversion demonstrated by the Bank of England may be sufficient to reap the benefits of price level targeting.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Nolan, Professor Charles
Authors: Chadha, J. S., and Nolan, C.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Manchester School
Publisher:John Wiley & Sons Ltd.
ISSN:1463-6786
ISSN (Online):1467-9957

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