Steve Ambler - Latest

• December 14, 2007

  The Costs of Inflation in New Keynesian Models

  Bank of Canada Review - Winter 2007-2008 Steve Ambler

  Ambler describes three new channels through which inflation affects economic welfare in New Keynesian models. These channels were absent from traditional analyses and may have caused researchers to underestimate the costs associated with variable inflation, even at relatively low levels of inflation. The article concludes with a preliminary assessment of the quantitative importance of the new channels and their significance for monetary policy.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation: costs and benefits, Monetary policy framework

• Price-Level Targeting and Stabilization Policy: A Review

  Staff Discussion Paper 2007-11 Steve Ambler

  The author surveys recent articles on the costs and benefits of price-level targeting versus inflation targeting, focusing on the benefits and costs of price-level targeting as a tool for stabilization policy. He reviews papers that examine how price-level targeting affects the short-run trade-off between output and inflation variability by influencing expectations of future inflation. The […]

  Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy framework JEL Code(s): E, E3, E31, E32, E5, E52

• Time-Consistent Control in Non-Linear Models

  Staff Working Paper 2007-3 Steve Ambler, Florian Pelgrin

  We show how to use optimal control theory to derive optimal time-consistent Markov-perfect government policies in nonlinear dynamic general equilibrium models, extending the result of Cohen and Michel (1988) for models with quadratic objective functions and linear dynamics. We replace private agents' costates by flexible functions of current states in the government's maximization problem.

  Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Monetary policy framework JEL Code(s): C, C6, C63, E, E6, E61, E62