The optimal rate of inflation
By: Stephanie Schmitt-Grohe, Martin Uribe
Contributors: Uribe, Martin; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16054; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16054.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "Observed inflation targets around the industrial world are concentrated at two percent per year.  This chapter investigates the extent to which the observed magnitudes of inflation targets are consistent with the optimal rate of inflation predicted by leading theories of monetary nonneutrality.  We find that consistently those theories imply that the optimal rate of inflation ranges from minus the real rate of interest to numbers insignificantly above zero.  Furthermore, we argue that the zero bound on nominal interest rates does not represent an impediment for setting inflation targets near or below zero"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/15/2010.

Includes bibliographical references.

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