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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Positive Trend Inflation and Determinacy in a Medium-Sized New Keynesian Model, International Journal of Central Banking 3 ; June (2020). Arias, Jonas E.; Ascari, Guido; Branzoli, Nicola; Castelnuovo, Efrem


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
Castelnuovo Efrem / Research
All authors as text Arias, Jonas E.; Ascari, Guido; Branzoli, Nicola; Castelnuovo, Efrem 
Number of authors
Status Published
Year of publication 2020 
Date 15.06.2020 
Name of article Positive Trend Inflation and Determinacy in a Medium-Sized New Keynesian Model 
Name of journal International Journal of Central Banking
Volume of issue 16 
Number of issue 3 ; June 
Pages 51-94 
Abstract This paper studies the challenge that increasing the inflation target poses to equilibrium determinacy in a mediumsized New Keynesian model without indexation fitted to the Great Moderation era. For moderate targets of the inflation rate, such as 2 or 4 percent, the probability of determinacy is near one conditional on the monetary policy rule of the estimated model. However, this probability drops significantly conditional on model-free estimates of the monetary policy rule based on real-time data. The difference is driven by the larger response of the federal funds rate to the output gap associated with the latter estimates.
Free text descriptor in Finnish inflaatio; mallit; inflaatiotavoitteet; rahapolitiikka; Yhdysvallat 
Free text descriptor in English New Keynesian Model; inflation; monetary policy 
JEL-codes E52, E3, C22 
ISSN / e-ISSN 1815-4654 
auki Internet addresses
Open Access Open access -publication