@ARTICLE{19061542_2005,
author = {Ball, Laurence M. and Mankiw, Gregory N. and Reis, Ricardo},
keywords = {monetary policy, Phillips curve, price-level targeting, монетарная политика},
title = {Monetary Policy for Inattentive Economies},
journal = {Journal of Monetary Economics},
year = {2005},
month = {},
volume = {52},
number = {4},
pages = {703–725},
url = {http://ecsocman.hse.ru/text/19061542/},
publisher = {},
language = {ru},
abstract = {We offer a contribution to the analysis of optimal monetary policy.
We begin with a critical assessment of the existing literature,
arguing that most work is based on implausible models of
inflation-output dynamics. We then suggest that this problem may be
solved with some recent behavioral models, which assume that price
setters are slow to incorporate macroeconomic information into the
prices they set. A specific such model is developed and used to
derive optimal policy. In response to shocks to productivity and
aggregate demand, optimal policy is price level targeting. Base drift
in the price level, which is implicit in the inflation targeting
regimes currently used in many central banks, is not desirable in
this model. When shocks to desired markups are added, optimal policy
is flexible targeting of the price level. That is, the central bank
should allow the price level to deviate from its target for a while
in response to these supply shocks, but it should eventually return
the price level to its target path. Optimal policy can also be
described as an elastic price standard: the central bank allows the
price level to deviate from its target when output is expected to
deviate from its natural rate. },
annote = {We offer a contribution to the analysis of optimal monetary policy.
We begin with a critical assessment of the existing literature,
arguing that most work is based on implausible models of
inflation-output dynamics. We then suggest that this problem may be
solved with some recent behavioral models, which assume that price
setters are slow to incorporate macroeconomic information into the
prices they set. A specific such model is developed and used to
derive optimal policy. In response to shocks to productivity and
aggregate demand, optimal policy is price level targeting. Base drift
in the price level, which is implicit in the inflation targeting
regimes currently used in many central banks, is not desirable in
this model. When shocks to desired markups are added, optimal policy
is flexible targeting of the price level. That is, the central bank
should allow the price level to deviate from its target for a while
in response to these supply shocks, but it should eventually return
the price level to its target path. Optimal policy can also be
described as an elastic price standard: the central bank allows the
price level to deviate from its target when output is expected to
deviate from its natural rate. }
}