Heterogeneous response of disaggregate inflation to monetary policy regime change: The role of price stickiness
This paper explores how a monetary regime change affects headline inflation via differential effects on various sectors in the economy. Using disaggregated CPI data for Canada, we find that the response to the adoption of inflation targeting (IT) was quite heterogeneous across sectors. While sticky-...
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Veröffentlicht in: | Journal of economic dynamics & control 2013-09, Vol.37 (9), p.1814-1832 |
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creator | Choi, Chi-Young O'Sullivan, Róisín |
description | This paper explores how a monetary regime change affects headline inflation via differential effects on various sectors in the economy. Using disaggregated CPI data for Canada, we find that the response to the adoption of inflation targeting (IT) was quite heterogeneous across sectors. While sticky-price sectors experienced a notable change in inflation dynamics following IT adoption, little structural change was observed in flexible price sectors. Our analysis based on a common factor model suggests that the structural changes in the sticky price sectors are driven by a decline in their responses to common aggregate shocks, including a monetary shock. |
doi_str_mv | 10.1016/j.jedc.2013.04.001 |
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Our analysis based on a common factor model suggests that the structural changes in the sticky price sectors are driven by a decline in their responses to common aggregate shocks, including a monetary shock.</description><subject>Canada</subject><subject>Common factor model</subject><subject>Consumer Price Index</subject><subject>Economic models</subject><subject>Economic theory</subject><subject>Experimental methods</subject><subject>Inflation</subject><subject>Inflation targeting (IT)</subject><subject>Monetary economics</subject><subject>Monetary policy</subject><subject>Monetary policy regime</subject><subject>Monetary theory</subject><subject>Price stickiness</subject><subject>Sectoral inflation dynamics</subject><subject>Structural change</subject><subject>Studies</subject><issn>0165-1889</issn><issn>1879-1743</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2013</creationdate><recordtype>article</recordtype><recordid>eNp9kT1vHCEQhpEVS77Y_gOukNKk2fWwsLdLlCay_CVZcuPUiINhzWYPLsBF8r8P50uVwtU0zzOad15Crhi0DNj6em5ntKbtgPEWRAvATsiKjYNs2CD4J7KqUN-wcZRn5HPOMwD0Xc9WJD5gwRQnDBj3mSbMuxgy0uio9VlPU8JJF6Q-uEUXHwMtkW5jwKLTG93FxZu3ak1-i9S86jDhN_ryijTF5X3JLnmDNBdvfvmAOV-QU6eXjJf_5jn5eXf7cvPQPD3fP978eGqM6PrSbJxlwmkDI3NguNxIxA5NJ63FwQLywa0drp1DtmFm2IAFsdZO2JGDZELwc_L1uHeX4u895qK2PhtcFv0eVDHBB9kPneQV_fIfOsd9CvU6xbiUfT_0XFaqO1ImxZwTOlWjbesTFAN16EDN6tCBOnSgQKjaQZW-HyWsUf94TCobj8Gg9QlNUTb6j_S_uSqSFg</recordid><startdate>20130901</startdate><enddate>20130901</enddate><creator>Choi, Chi-Young</creator><creator>O'Sullivan, Róisín</creator><general>Elsevier B.V</general><general>Elsevier Sequoia S.A</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>20130901</creationdate><title>Heterogeneous response of disaggregate inflation to monetary policy regime change: The role of price stickiness</title><author>Choi, Chi-Young ; O'Sullivan, Róisín</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c425t-bfd14fac081f0c39b9ee2ec29dde7d0e37f6fe6ffe1b1c7b0d046af4d83091443</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2013</creationdate><topic>Canada</topic><topic>Common factor model</topic><topic>Consumer Price Index</topic><topic>Economic models</topic><topic>Economic theory</topic><topic>Experimental methods</topic><topic>Inflation</topic><topic>Inflation targeting (IT)</topic><topic>Monetary economics</topic><topic>Monetary policy</topic><topic>Monetary policy regime</topic><topic>Monetary theory</topic><topic>Price stickiness</topic><topic>Sectoral inflation dynamics</topic><topic>Structural change</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Choi, Chi-Young</creatorcontrib><creatorcontrib>O'Sullivan, Róisín</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of economic dynamics & control</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Choi, Chi-Young</au><au>O'Sullivan, Róisín</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Heterogeneous response of disaggregate inflation to monetary policy regime change: The role of price stickiness</atitle><jtitle>Journal of economic dynamics & control</jtitle><date>2013-09-01</date><risdate>2013</risdate><volume>37</volume><issue>9</issue><spage>1814</spage><epage>1832</epage><pages>1814-1832</pages><issn>0165-1889</issn><eissn>1879-1743</eissn><coden>JEDCDH</coden><abstract>This paper explores how a monetary regime change affects headline inflation via differential effects on various sectors in the economy. 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subjects | Canada Common factor model Consumer Price Index Economic models Economic theory Experimental methods Inflation Inflation targeting (IT) Monetary economics Monetary policy Monetary policy regime Monetary theory Price stickiness Sectoral inflation dynamics Structural change Studies |
title | Heterogeneous response of disaggregate inflation to monetary policy regime change: The role of price stickiness |
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