Year: 2018
Author: Browne, Frank, Cronin, David
Credit and Capital Markets – Kredit und Kapital, Vol. 51 (2018), Iss. 3 : pp. 367–388
Abstract
Models of inflation usually have monetary policy affecting the economy through either an interest rate channel or a monetary/credit quantity channel but not through both simultaneously. It is argued here that policy is transmitted via two distinct types of agents – those that are and that are not liquidity-constrained. The implication is that both interest rate and monetary channels must be seen as complementary, joint indicators of inflation and must both be incorporated into models of inflation. A formal representation of price level determination and behaviour in this two-agent framework is provided and evaluated econometrically using US data.
Journal Article Details
Publisher Name: Global Science Press
Language: English
DOI: https://doi.org/10.3790/ccm.51.3.367
Credit and Capital Markets – Kredit und Kapital, Vol. 51 (2018), Iss. 3 : pp. 367–388
Published online: 2018-09
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 22
Keywords: inflation monetary policy liquidity constraints E31 E41 E51 E52
Author Details
| Section Title | Page | Action | Price |
|---|---|---|---|
| Frank Browne / David Cronin: A Two-Agent Model of Inflation | 1 |