Details

Autor(en) / Beteiligte

• Krause, Michael U.
• Moyen, Stéphane

Titel

Public Debt and Changing Inflation Targets

Ist Teil von

• American economic journal. Macroeconomics, 2016-10, Vol.8 (4), p.142-176

Ort / Verlag

Pittsburgh: American Economic Association

Erscheinungsjahr

2016

Link zum Volltext

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• What are the effects of a higher central bank inflation target on the burden of real public debt? Several recent proposals have suggested that even a moderate increase in the inflation target can have a pronounced effect on real public debt. We consider this question in a New Keynesian model with a maturity structure of public debt and an imperfectly observed inflation target. We find that moderate changes in the inflation target only have significant effects on real public debt if they are essentially permanent. Moreover, the additional benefits of not communicating a change in the inflation target are minor.