event
Brown Bag Lunch
Monday
26
April
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Can a Shifting Inflation Target Help at the Zero Lower Bound?

Chao Shen, PhD student in Development Economics
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Webinar streamed online

The Brown Bag Lunch is a weekly event organized by the Department of International Economics.

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As part of the Brown Bag Lunch series, the International Economics Department at the Graduate Institute is pleased to invite you to a public talk given by Chao Shen, PhD Student in Development Economics. He will present his research work titled:

Can a Shifting Inflation Target Help at the Zero Lower Bound?

Abstract: This paper proposes a short-run inflation target rule to stimulate the economy when the nominal interest rate is bounded and compares the rule with the price-level targeting. This inflation target rule is designed to respond to the gap between the desired policy rate and the actual policy rate. With a medium-scale New Keynesian model, the paper finds that this inflation target rule is a desirable policy framework in facing the ZLB. The paper also finds that the price-level targeting performs poorly if a supply shock drives the ZLB. In contrast, the inflation target rule's efficiency is consistent with both supply shock-driven and demand shock-driven ZLB. These findings contribute to the current discussion on reforming the inflation targeting system and shed light on the future monetary policy design to mitigate the severity of ZLB.

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Brown Bag Lunch

BBL Schedule Spring 2021