Costs and Benefits of an Anti-Inflationary Policy: Questions and Issues

@article{Buiter1983CostsAB,
  title={Costs and Benefits of an Anti-Inflationary Policy: Questions and Issues},
  author={Willem H. Buiter and Marcus Miller},
  journal={NBER Working Paper Series},
  year={1983}
}
This paper analyses how the output or unemployment cost of achieving a sustainable reduction in the rate of inflation depends on the structure of the wage-price process and how the "sacrifice ratio" can be minimized. In models where the natural rate is invariant under the anti-inflationary policies, price level inertia is not sufficient for a positive sacrifice ratio. Without sluggishness in the core inflation rate, a zero sacrifice ratio can be achieved simply through intelligent demand… 

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