Inflation, Stagflation, Relative Prices, and Imperfect Information

by Alex Cukierman

Overview

This book surveys the imperfect-information approach to inflation and its real effects. Two types of informational limitation are considered. One involves situations in which individuals have asymmetric information about the current general price level and consequently confuse relative and aggregate changes in prices. The other considers situations in which individuals cannot distinguish permanent from transitory changes as soon as they occur, creating a temporary but persistent confusion between such changes. The author presents the arguments within the context of the recent re-evaluations by economists of previously established views concerning inflation and its interaction with real phenomena.

Product Details

ISBN-13:	9780521070843
Publisher:	Cambridge University Press
Publication date:	08/28/2008
Pages:	220
Product dimensions:	5.90(w) x 8.90(h) x 0.60(d)

Table of Contents

1. A general overview; Part I. Aggregate-relative confusion: 2. Asymmetric information in economics and the information conveyed by prices and other signals; 3. Aggregate-relative confusion: implications for the Phillips curve; 4. Aggregate-relative confusion: implications for the distribution of inflationary expectations and for inflation uncertainty; 5. Implications of inflation uncertainty and differential inflationary expectations for the bond market and its allocative efficiency; 6. Aggregate-relative confusion: implications for relative price variability; 7. Place of the aggregate-relative confusion within the economics of asymmetric information: some concluding reflections; Part II. Permanent-transitory confusion: 8. Permanent-transitory confusion and other reasons for persistence: overview; 9. Permanent-transitory confusion: implications for stagflation and the persistence of unemployment; 10. Permanent-transitory confusion: implications for monetary policy and the efficiency of the price system; 11. Permanent-transitory confusion: implications for relative price variability and inflation.