Tambakis, D. N.
On the risk of long-run deflation
Economics Letters
Vol. 122(2) pp. 176-181 (2013)
Abstract: I determine expected long-run inflation in a two-state New Keynesian model driven by natural interest-rate uncertainty. Monetary policy switches between discretion in “normal times†and zero-lower-bound episodes when it is passive. Long-run U.S. inflation ranges from −1.8% to +1.2% p.a.
Keywords: Zero lower bound; Long-run inflation; Monetary policy
JEL Codes: E31, E52, E58
Author links: Demosthenes N. Tambakis
Publisher's Link: http://dx.doi.org/10.1016/j.econlet.2013.11.011