Izvorni znanstveni članak

https://doi.org/10.1080/1331677X.2020.1724172

Welfare consequences of inconsistent monetary policy implementation in Vietnam

Le Thanh Ha orcid.org/0000-0002-4517-9097
To Trung Thanh
Doan Ngoc Thang

Sažetak

We develop a New Keynesian model featuring Calvo price setting
and Calvo wage setting to quantify the welfare consequences of
shifting trend inflation in Vietnam. To capture the characteristics
of the Vietnamese economy, we use the Simulated Method of
Moment and calibrate parameters jointly to match the important
selected moments of Vietnamese data. The results show a severe
consequence of a constant positive trend inflation and an
exogenous shock to trend inflation, especially when a central
bank sets a high level of inflation target. Among staggered price
and wage contracts, the latter play a vital role in transmitting the
adverse impacts of constant and shifting trend inflation into the
economy. Based on our analyses, raising inflation targets would
seem to be a bad policy prescription in Vietnam.

Ključne riječi

Shifting trend inflation; welfare consequences; second and third-order approximation; staggered price and wage contracts; Vietnam

Hrčak ID:

254404

URI

https://hrcak.srce.hr/254404

Datum izdavanja:

9.2.2021.

Posjeta: 585 *