Sacrifice Ratios and Inflation Targeting: The Role of Credibility

Two recent papers (Gonçalves and Carvalho, 2009; and Brito, 2010) hold contradictory views regarding the role of inflation targeting during periods of disinflation. The first paper claims that inflation targeting reduces sacrifice ratios¿i.e., the ratio of output losses to the change in trend inflat...

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Autores:
De Roux, Nicolás
Hofstetter, Marc
Tipo de recurso:
Work document
Fecha de publicación:
2012
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
spa
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/41017
Acceso en línea:
http://hdl.handle.net/1992/41017
Palabra clave:
Credibility
Disinflation
Inflation targeting
Monetary policy
Sacrifice ratios
E31, E32, E52, E58
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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spelling Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2De Roux, Nicolásceb7fb6d-440c-4841-ac9c-87e70a59508d400Hofstetter, Marcf970b74f-4608-4216-a9db-406e372d5e914002020-07-28T17:15:39Z2020-07-28T17:15:39Z20121657-5334http://hdl.handle.net/1992/410171657-719110.57784/1992/41017instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/Two recent papers (Gonçalves and Carvalho, 2009; and Brito, 2010) hold contradictory views regarding the role of inflation targeting during periods of disinflation. The first paper claims that inflation targeting reduces sacrifice ratios¿i.e., the ratio of output losses to the change in trend inflation¿during disinflations; the second paper refutes this result. We show here that inflation targeting only matters if disinflations are slow. The credibility gains of a fast disinflation make inflation targeting irrelevant for reducing the output-inflation trade-off.24 páginasspaUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 03 Febrero de 2012https://ideas.repec.org/p/col/000089/009325.htmlSacrifice Ratios and Inflation Targeting: The Role of CredibilityDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPCredibilityDisinflationInflation targetingMonetary policySacrifice ratiosE31, E32, E52, E58Facultad de EconomíaPublicationORIGINALdcede2012-03.pdfdcede2012-03.pdfapplication/pdf1867679https://repositorio.uniandes.edu.co/bitstreams/a38fd2ef-6cad-4f56-9179-3d70cb0178db/downloade58e977b6a8768cd93e55466e46d21b8MD51THUMBNAILdcede2012-03.pdf.jpgdcede2012-03.pdf.jpgIM Thumbnailimage/jpeg8392https://repositorio.uniandes.edu.co/bitstreams/ea4b57d6-2256-47e6-ae50-635475aba6af/download39d4af24066c0dd37ccc8adf6682e7aaMD55TEXTdcede2012-03.pdf.txtdcede2012-03.pdf.txtExtracted texttext/plain42769https://repositorio.uniandes.edu.co/bitstreams/2d8abdc6-ee59-4d60-825a-59aab465b3b7/download8eb9196d7252eabd1817f0cb68e88295MD541992/41017oai:repositorio.uniandes.edu.co:1992/410172024-06-04 15:42:34.175http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co
dc.title.none.fl_str_mv Sacrifice Ratios and Inflation Targeting: The Role of Credibility
title Sacrifice Ratios and Inflation Targeting: The Role of Credibility
spellingShingle Sacrifice Ratios and Inflation Targeting: The Role of Credibility
Credibility
Disinflation
Inflation targeting
Monetary policy
Sacrifice ratios
E31, E32, E52, E58
title_short Sacrifice Ratios and Inflation Targeting: The Role of Credibility
title_full Sacrifice Ratios and Inflation Targeting: The Role of Credibility
title_fullStr Sacrifice Ratios and Inflation Targeting: The Role of Credibility
title_full_unstemmed Sacrifice Ratios and Inflation Targeting: The Role of Credibility
title_sort Sacrifice Ratios and Inflation Targeting: The Role of Credibility
dc.creator.fl_str_mv De Roux, Nicolás
Hofstetter, Marc
dc.contributor.author.none.fl_str_mv De Roux, Nicolás
Hofstetter, Marc
dc.subject.keyword.none.fl_str_mv Credibility
Disinflation
Inflation targeting
Monetary policy
Sacrifice ratios
topic Credibility
Disinflation
Inflation targeting
Monetary policy
Sacrifice ratios
E31, E32, E52, E58
dc.subject.jel.none.fl_str_mv E31, E32, E52, E58
description Two recent papers (Gonçalves and Carvalho, 2009; and Brito, 2010) hold contradictory views regarding the role of inflation targeting during periods of disinflation. The first paper claims that inflation targeting reduces sacrifice ratios¿i.e., the ratio of output losses to the change in trend inflation¿during disinflations; the second paper refutes this result. We show here that inflation targeting only matters if disinflations are slow. The credibility gains of a fast disinflation make inflation targeting irrelevant for reducing the output-inflation trade-off.
publishDate 2012
dc.date.issued.none.fl_str_mv 2012
dc.date.accessioned.none.fl_str_mv 2020-07-28T17:15:39Z
dc.date.available.none.fl_str_mv 2020-07-28T17:15:39Z
dc.type.spa.fl_str_mv Documento de trabajo
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dc.type.driver.spa.fl_str_mv info:eu-repo/semantics/workingPaper
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url http://hdl.handle.net/1992/41017
dc.language.iso.none.fl_str_mv spa
language spa
dc.relation.ispartofseries.none.fl_str_mv Documentos CEDE No. 03 Febrero de 2012
dc.relation.repec.SPA.fl_str_mv https://ideas.repec.org/p/col/000089/009325.html
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eu_rights_str_mv openAccess
dc.format.extent.none.fl_str_mv 24 páginas
dc.publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
institution Universidad de los Andes
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