TY  - UNPD
A1  - Billi, Roberto
T1  - The optimal inflation buffer with a zero bound on nominal interest rates
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2005,17
N2  - This paper characterizes the optimal inflation buffer consistent with a zero lower bound on nominal interest rates in a New Keynesian sticky-price model. It is shown that a purely forward-looking version of the model that abstracts from inflation inertia would significantly underestimate the inflation buffer. If the central bank follows the prescriptions of a welfare-theoretic objective, a larger buffer appears optimal than would be the case employing a traditional loss function. Taking also into account potential downward nominal rigidities in the price-setting behavior of firms appears not to impose significant further distortions on the economy. JEL Klassifikation: C63, E31, E52 .
T3  - CFS working paper series - 2005, 17 
KW  - Inflation Inertia
KW  - Downward Nominal Rigidity
KW  - Nonlinear Policy
KW  - Liquidity Trap
KW  - Inflation
Y1  - 2005
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/4398
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-10932
IS  - November 25, 2004
ER  -