James Yetman - Latest

• Predetermined Prices and the Persistent Effects of Money on Output

  Staff Working Paper 2001-13 Michael Devereux, James Yetman

  This paper illustrates a model of predetermined pricing, where firms set a fixed schedule of nominal prices at the time of price readjustment, based on the work of Fischer (1977). This type of price-setting specification cannot produce any excess persistence in a fixed-duration model of staggered prices, but we show that with a probabilistic model of price adjustment, as in Calvo (1983), a predetermined pricing specification can produce excess persistence.

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary policy transmission JEL Code(s): E, E3, E30

• Gaining Credibility for Inflation Targets

  Staff Working Paper 2001-11 James Yetman

  In this paper, I consider a simple model in which agents learn about the inflation target of a central bank over time by observing the policy instrument or inflation outcomes. Measuring credibility as the distance between the perceived target and the actual target, an increase in credibility is beneficial to the central bank because it brings the policy consistent with attaining the inflation target closer to that required to attain the output target.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Inflation targets JEL Code(s): E, E5, E52

• Identifying Policy-makers' Objectives: An Application to the Bank of Canada

  Staff Working Paper 2000-11 Nicholas Rowe, James Yetman

  In this paper, we develop a new way to test hypotheses about policy-makers' targets, and we implement that test for Canadian monetary policy.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets JEL Code(s): E, E5, E52, E6, E61

• Probing Potential Output: Monetary Policy, Credibility, and Optimal Learning under Uncertainty

  Staff Working Paper 2000-10 James Yetman

  The effective conduct of monetary policy is complicated by uncertainty about the level of potential output, and thus about the size of the monetary policy response that would be sufficient to achieve the targeted inflation rate. One possible response to such uncertainty is for the monetary authority to "probe," interpreted here as actively using its policy response to learn about the level of potential output.

  Content Type(s): Staff research, Staff working papers Topic(s): Credibility, Monetary policy and uncertainty, Potential output JEL Code(s): E, E5, E52, E58