1 option
How Inflation Affects Macroeconomic Performance: An Agent-Based Computational Investigation / Quamrul Ashraf, Boris Gershman, Peter Howitt.
- Format:
- Book
- Author/Creator:
- Ashraf, Quamrul.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18225.
- NBER working paper series no. w18225
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2012.
- Summary:
- We use an agent-based computational approach to show how inflation can worsen macroeconomic performance by disrupting the mechanism of exchange in a decentralized market economy. We find that increasing the trend rate of inflation above 3 percent has a substantial deleterious effect, but lowering it below 3 percent has no significant macroeconomic consequences. Our finding remains qualitatively robust to changes in parameter values and to modifications to our model that partly address the Lucas critique. Finally, we contribute a novel explanation for why cross-country regressions may fail to detect a significant negative effect of trend inflation on output even when such an effect exists in reality.
- Notes:
- Print version record
- July 2012.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.