Briefing
Inflation and the Timing of Actions With Discretionary Monetary Policy
Abstract: The degree of inflation bias in sticky-price models can depend on the order of actions within a period. If the central bank moves last, it takes the inflation rate as given and targets the markup, leading to a higher equilibrium inflation rate. We provide a simple static model to explain this mechanism.
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https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-40
Description: Briefing
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2025-10-31
Volume: 25
Issue: 40