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- Title
The danger of inflating expectations of macroeconomic stability: heuristic switching in an overlapping generations monetary model.
- Authors
Brazier, Alex; Harrison, Richard; King, Mervyn; Yates, Tony
- Abstract
The article discusses the heuristic switching in overlapping numbers of monetary policy model to determine the risks of amplifying expectations of macroeconomic stability. The scheme predicts future inflation through lagged inflation heuristic and inflation target heuristic programs. The policy can stabilize the economy by responding to inflation expectations since it contains information about economic conditions.
- Subjects
MONETARY policy; PRICE inflation; MACROECONOMICS; ECONOMIC forecasting; ECONOMETRICS
- Publication
Bank of England Quarterly Bulletin, 2006, Vol 46, Issue 3, p320
- ISSN
0005-5166
- Publication type
Article