Philly Fed: central banks can do more to anchor inflation expectations
A paper published by the Philadelphia Federal Reserve on Wednesday says that monetary authorities can coordinate private-sector expectations on inflation more precisely using short-term nominal interest rates.
The author, Roc Armenter, shows that the short-term nominal interest rate, determined at spot markets at the initial date, can anchor private-sector expectations to the lowest sustainable inflation at all dates and contingencies.
Armenter introduces nominal asset markets using an infinite
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