TY  - JOUR
AU  - Ball,Laurence
TI  - Disinflation With Imperfect Credibility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3983
PY  - 1992
Y2  - February 1992
UR  - http://www.nber.org/papers/w3983
L1  - http://www.nber.org/papers/w3983.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 theory of the real effects of disinflation. As in New Keynesian models, price adjustment is staggered across firms, As in New Classical models, credibility is imperfect: the monetary authority may not complete a promised disinflation. The combination of imperfect credibility and staggering yields more plausible results than either of these assumptions alone. In particular, an announced disinflation reduces expected output if credibility is sufficiently low.
ER  -