dc.contributor |
Háskólinn í Reykjavík |
dc.contributor |
Reykjavik University |
dc.contributor.author |
Baldursson, Friðrik Már |
dc.contributor.author |
Hall, Axel |
dc.date.accessioned |
2017-03-16T13:53:30Z |
dc.date.available |
2017-03-16T13:53:30Z |
dc.date.issued |
2008 |
dc.identifier |
10.24122/tve.a.2008.6.2.9 |
dc.identifier.citation |
Friðrik Már Baldursson; Axel Hall. (2008). Out of reach? Convergence to an inflation target in the Central Bank of Iceland’s macroeconomic model. Tímarit um viðskipti og efnahagsmál, 6(2), 83-106. Doi:doi.org/10.24122/tve.a.2008.6.2.9 |
dc.identifier.issn |
1670-4444 |
dc.identifier.issn |
1670-4851 (e-ISSN) |
dc.identifier.uri |
https://hdl.handle.net/20.500.11815/208 |
dc.description.abstract |
Inflation scenarios in forecasts of the Central Bank of Iceland (CBI) appear to converge to the inflation target (2.5%) in 8-9 quarters. We ask whether this is a coincidence or an inherent property of the CBI’s model, QMM. We formulate a sub-model, containing equations for inflation, inflation expectations, wages, exchange rate and the policy interest rate. We find that rapid convergence toward the inflation target is a property of the QMM when a Taylor-rule is included in the model. Underlying is an inflation expectations equation which assumes a high degree of credibility of the CBI. This equation, however, lacks empirical underpinnings. When we replace the QMM expectations equation with an estimated equation, a more realistic picture emerges where the Central Bank has to raise the policy rate considerably higher than in QMM scenarios and it takes much longer to reach the inflation target. |
dc.format.extent |
83-106 |
dc.language.iso |
en |
dc.publisher |
Viðskiptafræðideild og hagfræðideild Háskóla Íslands, viðskiptafræðideild Háskólans í Reykjavík og Seðlabanki Íslands. |
dc.relation.ispartofseries |
Tímarit um viðskipti og efnahagsmál;6(2) |
dc.rights |
info:eu-repo/semantics/openAccess |
dc.subject |
Verðbólga |
dc.subject |
Seðlabankar |
dc.subject |
Þjóðhagsspár |
dc.title |
Out of reach? Convergence to an inflation target in the Central Bank of Iceland’s macroeconomic model |
dc.type |
info:eu-repo/semantics/article |
dcterms.license |
Creative Commons Attribution 4.0 License. |
dc.date.updated |
2017-03-15T14:26:24Z |
dc.description.version |
Peer Reviewed |
dc.description.version |
Ritrýnt tímarit |
dc.identifier.journal |
Research in applied business and economics |
dc.identifier.doi |
10.24122/tve.a.2008.6.2.9 |
dc.relation.url |
http://www.efnahagsmal.is/article/view/a.2008.6.2.9 |
dc.contributor.school |
Viðskiptadeild (HR) |
dc.contributor.school |
School of Business (RU) |