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| Author: | Betts, C. Rudebusch, G. |
| Title: | Opportunistic and deliberate disinflation under imperfect credibility |
| Journal: | Journal of Money, Credit and Banking
2000 : NOV, VOL. 32:4 PART 1, p. 722-745 |
| Index terms: | INTERNATIONAL MONETARY SYSTEM POLICY DEPRECIATION |
| Language: | eng |
| Abstract: | One strategy for disinflation prescribes a deliberate path toward low inflation. A contrasting opportunistic approach eschews deliberate action and instead waits for unforseen shocks to reduce inflation. This paper compares the ability of these two approaches to achieve disinflation and at what cost. The authors analyze these issues using the Federal Reserve's FRB/US model, which allows alternative assumptions to be made about expectations held by agents in the economy, hence the credibility of the central bank can be considered in assessing the cost of deliberate and opportunistic inflations. |
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