Evidence on the Functional Relationship between Relative Price Variability and Inflation with Implications for Monetary Policy

Dados Bibliográficos

ID9725971
AutoresD Fielding (0000-0003-0506-4233, University of Otago), Paul Mizen (0000-0002-6193-0872, University of Nottingham)
Ano2008
Volume75
Fascículo300
Páginas683-699
Data de publicação2008-11-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/j.1468-0335.2007.00637.x
OpenAlexW2163639681
IdiomaEN
Referências citadas31

This paper considers the functional relationship between relative price variability (RPV) and inflation using quarterly personal consumer expenditure data in the US over 1967(I)–2003(I), deriving some implications for monetary policy. Non‐parametric regression techniques are used to explore the shape of the RPV function, and this shape is related to the theory outlined by J. J. Rotemberg. The empirical RPV function yields a plausible ‘optimal’ value of inflation in the region of five percentage points, which is consistent with this theory and lies within the range of values cited by recent evaluations of ‘sand’ and ‘grease’ effects

Biology · Econometrics · Economics · Function (biology) · Inflation (cosmology) · Monetary economics · Monetary policy · Range (aeronautics) · Relative price · Statistics · Value (mathematics) · Economics of Agriculture and Food Markets · Fiscal Policy and Economic Growth · Mathematics · Monetary Policy and Economic Impact