Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53961
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dc.contributor.authorAmano, Roberen_US
dc.contributor.authorEngle-Warnick, Jimen_US
dc.contributor.authorShukayev, Maliken_US
dc.date.accessioned2011-09-12en_US
dc.date.accessioned2011-12-15T12:58:48Z-
dc.date.available2011-12-15T12:58:48Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/53961-
dc.description.abstractIn this paper, we use an economics decision-making experiment to test a key assumption underpinning the efficacy of price-level targeting relative to inflation targeting for business cycle stabilization and mitigating the effects of the zero lower bound on nominal interest rates. In particular, we attempt to infer whether experimental participants understand the stationary nature of the price level under price-level targeting by observing their inflation forecasting behaviour in a laboratory setting. This is an important assumption since, without it, price-level targeting can lead to worse outcomes than inflation targeting. Our main result suggests that participants formulate inflation expectations consistent with the target-reverting nature of the price level but that they do not fully utilize it in their forecasts of future inflation.en_US
dc.language.isoengen_US
dc.publisher|aBank of Canada |cOttawaen_US
dc.relation.ispartofseries|aBank of Canada Working Paper |x2011,18en_US
dc.subject.jelE32en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordMonetary policy frameworken_US
dc.titlePrice-level targeting and inflation expectations: Experimental evidenceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn668099135en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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