Credible Disinflation with Staggered Price Setting
Working Paper 3555
DOI 10.3386/w3555
Issue Date
This paper determines the real effects of credible disinflation when price setting is staggered. The results are surprising: a fairly quick disinflation causes a boom. This finding suggests that nominal price rigidity alone does not explain why disinflation is costly in actual economies.
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American Economic Review, March 1994 citation courtesy of 
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