Working Paper

Disinflationary Booms?

Author

  • Christian Merkl
Publication Date

This paper shows that announced credible disinflations under inflation targeting lead to a boom in a standard New Keynesian model (i.e. a disinflationary boom). This finding is robust with respect to various parameterizations and disinflationary experiments. Thus, it differs from previous findings about disinflationary booms under monetary targeting.

Info

JEL Classification
E30, E31

Key Words

  • Disinflation
  • Disinflationary Boom
  • Inflation Targeting