John Barrdear

How do central banks achieve nominal stability?  In a new working paper, I show that in a version of the textbook New Keynesian model with incomplete information, beyond establishing the steady-state inflation rate a central bank doesn’t need to do anything for prices (and not just the rate of inflation) to remain determinate and stationary.  The paper is available via the Staff Working Paper No.532 or my research page (a non-technical summary is here). It’s still a work in progress and any feedback is welcome, so please feel free to contact me.

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