TY  - JOUR
AU  - Ball,Laurence M.
TI  - Time-Consistent Policy and Persistent Changes in Inflation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3529
PY  - 1990
Y2  - December 1990
UR  - http://www.nber.org/papers/w3529
L1  - http://www.nber.org/papers/w3529.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu
AB  - This paper presents a model of dynamically consistent monetary policy that explains changes in inflation over time. In the model -- as in the postwar United States -- adverse supply shocks trigger persistent increases in inflation, and disinflation occurs when a tough policymaker creates a recession. The paper also proposes an approach to selecting a unique, plausible equilibrium in infinite-horizon models of monetary policy.
ER  -