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| Author: | Ball, L. |
| Title: | Credible disinflation with staggered price-setting |
| Journal: | American Economic Review
1994 : MAR, VOL. 84:1, p. 282-289 |
| Index terms: | PRICE LEVEL ECONOMIC CONDITIONS REVIEW |
| Language: | eng |
| Abstract: | Although most macroeconomists agree that disinflations reduce output, there is no consensus about why. New classical economists argue that credibility problems are central - that disinflation would be costless if the public believed policy announcements. Many new Keynesians, by contrast, view credibility as less important. They blame the costs of disinflation on inflationary inertia arising from the frictions in wage- and price-setting, especially the staggered timing of price adjustment introduced by John Taylor and Olivier Blanchard. |
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