Economics, Econometrics and Finance
4 years ago

Central banks adjusting policy less frequently leads to lower inflation.

Should Monetary Policy be Adjusted Frequently
Harry Huizinga, Sylvester Eijffinger

Paper Summary

The frequency of adjusting monetary policy affects inflation rates. Central banks that change policies less often have lower inflation but more output variability. Evidence from key countries shows that more frequent policy changes are linked to higher inflation rates.

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