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

Datos Bibliográficos

ID9725971
AutoresD Fielding (0000-0003-0506-4233, University of Otago), Paul Mizen (0000-0002-6193-0872, University of Nottingham)
Año2008
Volumen75
Número300
Páginas683-699
Fecha de publicación2008-11-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaEconomica (JOURNAL)
Identificadores de la revistaISSN: 0013-0427 • E-ISSN: 1468-0335
EditorialWiley (PUBLISHER • GB)
DOI10.1111/j.1468-0335.2007.00637.x
OpenAlexW2163639681
IdiomaEN
Referencias 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