Petrella, Ivan
[VerfasserIn]
;
Rossi, Raffaele
[Sonstige Person, Familie und Körperschaft];
Santoro, Emiliano
[Sonstige Person, Familie und Körperschaft]
Erschienen in:Univ. of Copenhagen Dept. of Economics Discussion Paper ; No. 12-20
Umfang:
1 Online-Ressource (17 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2175612
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 5, 2012 erstellt
Beschreibung:
This paper contributes to a recent debate about the structural and institutional conditions under which discretionary monetary policy-making may be superior to timeless perspective. To this end, we formulate an input-output economy in which firms' technology employs both labor and intermediate goods produced by all firms in the economy. Unlike price stickiness, input materials reduce the slope of the New Keynesian Phillips curve, while leaving the policy maker's preference for consumption stabilization unaffected. Strategic complementarities stemming from realistic degrees of input-output interactions greatly amplify the loss of social welfare under timeless perspective, even for small departures of the economy from its steady state. By contrast, price rigidity proves to be ineffective at improving the performance of discretion relative to timeless perspective