Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306369 
Year of Publication: 
2024
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 13/2024
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Properties of average inflation targeting under imperfect knowledge and learning have been studied only for the Rotemberg NK model, where price stickiness arises from adjustment costs in price setting. This note fills the gap by studying average inflation targeting in the NK model with Calvo price stickiness. It is shown that in this setting the two models have the same basic properties, unless the central bank aggressively stabilizes output instead of average inflation.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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