Inflation surprises in a New Keynesian economy with a "true" consumption function.
The resurgence of inflation has been accompanied by a reversal of prospects of growth, with a prominent role assigned to the fall of households' purchasing power. Yet this real income effect of inflation surprises, independent of restrictive monetary policy, is not present in the standard New Keynes...
| Publicado en: | Economic Inquiry Vol. 62; no. 3; pp. 1192 - 1216 |
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| Formato: | Artículo |
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Wiley-Blackwell
Jul2024
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=178020550&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 178020550 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Jul2024 vid: 62 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 178020550 10.1111/ecin.13207 ppf: 1192 ppct: 24 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 1MB tig: atl: Inflation surprises in a New Keynesian economy with a "true" consumption function. aug: au: Tamborini, Roberto affil: Department of Economics and Management, University of Trento, Trento, Italy su: Price inflation Income Monetary policy Real income Purchasing power sug: subj: Price inflation Income Monetary policy Real income Purchasing power keyword: cost‐push inflation New Keynesian models for monetary policy real income effect stagflation cost‐push inflation New Keynesian models for monetary policy real income effect stagflation ab: The resurgence of inflation has been accompanied by a reversal of prospects of growth, with a prominent role assigned to the fall of households' purchasing power. Yet this real income effect of inflation surprises, independent of restrictive monetary policy, is not present in the standard New Keynesian models for monetary policy. The reason lies in the formulation of the consumption‐based "IS equation". The paper shows how the income effect can be introduced by reformulating the consumption function, with the consequence that it exerts an autonomus stabilization effect on inflation. The main monetary policy implications are examined by means of simulations. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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