Title of article
Labor marketsearch,theTaylorprinciple,andindeterminacy
Author/Authors
Takushi Kurozumi، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2010
Pages
8
From page
851
To page
858
Abstract
In asticky-pricemodelwithlabormarketsearchandmatchingfrictions,forecast-based
interest ratepolicyalmostalwaysinducesindeterminacywhenitisstrictlyinflation
targetingandsatisfiestheTaylorprinciple.Indeterminacyisduetoavacancychannelof
monetarypolicythatmakesinflationexpectationsself-fulfilling.Theeffectofthis
channelstrengthensasthesluggishnessoftheadjustmentofemploymentrelativeto
that ofconsumptionincreases.Whenthisrelativesluggishnessishigh,theTaylor
principlefailstoensuredeterminacy,regardlessofwhetherthepolicyisforecast-based
or outcome-based,whetheritisstrictlyorflexiblyinflationtargeting,orcontainspolicy
rate smoothing.
Journal title
Journal of Monetary Economics
Serial Year
2010
Journal title
Journal of Monetary Economics
Record number
846433
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