Optimality criteria of hybrid inflation-price level targeting (outdated version)

Bokor, László (2007): Optimality criteria of hybrid inflation-price level targeting (outdated version).

Abstract

A HIGHLY IMPROVED VERSION OF THIS PAPER CAN BE FOUND AT http://english.mnb.hu/Kiadvanyok/mnben_mnbfuzetek/mnben_elozo/mnben_WP_2010_8

This paper provides a comprehensive analysis of the relative performance of inflation targeting, price level targeting, and hybrid targeting of them in a simple three-period steady state to steady state economy facing transmission lag, and derives optimal policies implementing commitment solution under all set of hybrid expectations, social preference, and cost-push shock persistence. The main intention of the examination is to reveal the nature of the interrelations between economic and policy parameters.

• Item Type: MPRA Paper
• Language: English
• Keywords: inflation targeting; price level targeting; hybrid targeting; optimal policy
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General

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