Download This PaperImplications for Determinacy with Average Inflation Targeting
9 Pages Posted: 17 May 2022
There are 2 versions of this paper
Implications for Determinacy with Average Inflation Targeting
Number of pages: 8
Posted: 18 May 2022
Downloads
19
Abstract
We use a standard New Keynesian model to explore implications of backward- and forward looking windows for monetary policy with average inflation targeting and investigate the conditions for determinacy. A unique equilibrium rules out sunspot shocks that can lead to self-fulfilling shocks for inflation expectations. We find limitations for the length of the forward window and demonstrate how this depends on other parameters in the model, including parameters governing monetary policy and expectations formation.
Keywords: E50, E52, E58
Suggested Citation: Suggested Citation
Ahmad, Yamin S. and Murray, James, Implications for Determinacy with Average Inflation Targeting. Available at SSRN: https://ssrn.com/abstract=4111935 or http://dx.doi.org/10.2139/ssrn.4111935
Do you have a job opening that you would like to promote on SSRN?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.