Corpus ID: 152961814

The Inflation Bias Result Revisited

  title={The Inflation Bias Result Revisited},
  author={A. Cukierman},
  • A. Cukierman
  • Published 1999
  • Economics
  • The Kydland-Prescott, Barro-Gordon inflation bias result relies on the presumption that policymakers aim at achieving a level of employment above the normal level. This presumption has been recently questioned by both academics and policymakers on the ground of realism. This note shows that even if policymakers are content with the normal level of employment there is an inflation bias if the following two realistic conditions are satisfied. The central bank is uncertain about the future state… CONTINUE READING
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