Inflation Variability and Gradualist Monetary Policy

摘要: This paper considers the optimal approach to reducing inflation when cost of is its conditional variability. Inflation stochastically related money growth, with unobservable time-varying autonomous and induced components. A sharp reduction in growth provides information about responsiveness money, but also induces variability as economy heads into unknown territory. Gradual policy always model explains why moderate-inflation countries adopt a much more gradual than high-inflation countries. Additionally, analysis sheds light on general problem learning two parameters.