Input–output interactions and optimal monetary policy

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Standard

Input–output interactions and optimal monetary policy. / Petrella, Ivan; Santoro, Emiliano.

I: Journal of Economic Dynamics and Control, Bind 35, Nr. 11, 2011, s. 1817–1830.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Petrella, I & Santoro, E 2011, 'Input–output interactions and optimal monetary policy', Journal of Economic Dynamics and Control, bind 35, nr. 11, s. 1817–1830. https://doi.org/10.1016/j.jedc.2011.04.015

APA

Petrella, I., & Santoro, E. (2011). Input–output interactions and optimal monetary policy. Journal of Economic Dynamics and Control, 35(11), 1817–1830. https://doi.org/10.1016/j.jedc.2011.04.015

Vancouver

Petrella I, Santoro E. Input–output interactions and optimal monetary policy. Journal of Economic Dynamics and Control. 2011;35(11):1817–1830. https://doi.org/10.1016/j.jedc.2011.04.015

Author

Petrella, Ivan ; Santoro, Emiliano. / Input–output interactions and optimal monetary policy. I: Journal of Economic Dynamics and Control. 2011 ; Bind 35, Nr. 11. s. 1817–1830.

Bibtex

@article{0e6e11c200a94f28ae1dd7c46735f4f0,
title = "Input–output interactions and optimal monetary policy",
abstract = "This paper deals with the implications of factor demand linkages for monetary policy design in a two-sector dynamic general equilibrium model. Part of the output of each sector serves as a production input in both sectors, in accordance with a realistic input–output structure. Strategic complementarities induced by factor demand linkages significantly alter the transmission of shocks and amplify the loss of social welfare under optimal monetary policy, compared to what is observed in standard two-sector models. The distinction between value added and gross output that naturally arises in this context is of key importance to explore the welfare properties of the model economy. A flexible inflation targeting regime is close to optimal only if the central bank balances inflation and value added variability. Otherwise, targeting gross output variability entails a substantial increase in the loss of welfare.",
keywords = "Input-output interactions, Multi-sector models, Optimal monetary policy",
author = "Ivan Petrella and Emiliano Santoro",
note = "JEL classification: E23, E32, E52 ",
year = "2011",
doi = "10.1016/j.jedc.2011.04.015",
language = "English",
volume = "35",
pages = "1817–1830",
journal = "Journal of Economic Dynamics and Control",
issn = "0165-1889",
publisher = "Elsevier",
number = "11",

}

RIS

TY - JOUR

T1 - Input–output interactions and optimal monetary policy

AU - Petrella, Ivan

AU - Santoro, Emiliano

N1 - JEL classification: E23, E32, E52

PY - 2011

Y1 - 2011

N2 - This paper deals with the implications of factor demand linkages for monetary policy design in a two-sector dynamic general equilibrium model. Part of the output of each sector serves as a production input in both sectors, in accordance with a realistic input–output structure. Strategic complementarities induced by factor demand linkages significantly alter the transmission of shocks and amplify the loss of social welfare under optimal monetary policy, compared to what is observed in standard two-sector models. The distinction between value added and gross output that naturally arises in this context is of key importance to explore the welfare properties of the model economy. A flexible inflation targeting regime is close to optimal only if the central bank balances inflation and value added variability. Otherwise, targeting gross output variability entails a substantial increase in the loss of welfare.

AB - This paper deals with the implications of factor demand linkages for monetary policy design in a two-sector dynamic general equilibrium model. Part of the output of each sector serves as a production input in both sectors, in accordance with a realistic input–output structure. Strategic complementarities induced by factor demand linkages significantly alter the transmission of shocks and amplify the loss of social welfare under optimal monetary policy, compared to what is observed in standard two-sector models. The distinction between value added and gross output that naturally arises in this context is of key importance to explore the welfare properties of the model economy. A flexible inflation targeting regime is close to optimal only if the central bank balances inflation and value added variability. Otherwise, targeting gross output variability entails a substantial increase in the loss of welfare.

KW - Input-output interactions

KW - Multi-sector models

KW - Optimal monetary policy

U2 - 10.1016/j.jedc.2011.04.015

DO - 10.1016/j.jedc.2011.04.015

M3 - Journal article

VL - 35

SP - 1817

EP - 1830

JO - Journal of Economic Dynamics and Control

JF - Journal of Economic Dynamics and Control

SN - 0165-1889

IS - 11

ER -

ID: 33780891