LIBERTY STREET ECONOMICS
Disinflation Policies with a Flat Phillips Curve Marco Del Negro, Aidan Gleich, Shlok Goyal, Alissa Johnson, and Andrea Tambalotti The authors use the New York Fed DSGE model to study how alternative monetary policy strategies might contribute to bringing inflation back down to 2 percent. Their main finding is that there is no monetary silver bullet. Due to a flat Phillips curve—a well-documented feature of the economic environment of the last three decades—monetary policy can only achieve faster disinflation at a considerable cost in terms of forgone economic activity. This is true regardless of the systematic approach followed by the central bank in the model to pursue its objective. |
No comments:
Post a Comment