TY - JOUR
T1 - Policy reform and optimal inflation rate for Japan in computable OLG economy
AU - Shimasawa, Manabu
AU - Sadahiro, Akira
PY - 2009/3
Y1 - 2009/3
N2 - We build a computable OLG model with monetary growth to calculate the optimal level of inflation rate for Japan, and to study policy reforms make any quantitative impacts on it. Four main results were obtained: (i) the optimal inflation rate for Japan is calculated around 1.0%; (ii) the calculated underlying inflation rate is about 9% under the present Japanese economic and fiscal situation; (iii) to prevent high inflation, fiscal reconstruction needs to be implemented; and (iv) if fundamental fiscal reform is conducted, the optimal inflation rate might be achieved. These results are very robust to calibration.
AB - We build a computable OLG model with monetary growth to calculate the optimal level of inflation rate for Japan, and to study policy reforms make any quantitative impacts on it. Four main results were obtained: (i) the optimal inflation rate for Japan is calculated around 1.0%; (ii) the calculated underlying inflation rate is about 9% under the present Japanese economic and fiscal situation; (iii) to prevent high inflation, fiscal reconstruction needs to be implemented; and (iv) if fundamental fiscal reform is conducted, the optimal inflation rate might be achieved. These results are very robust to calibration.
KW - Calibration
KW - Fiscal reform
KW - Money-in-the-utility
KW - Optimal inflation rate
KW - Overlapping generations
UR - http://www.scopus.com/inward/record.url?scp=58249115131&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=58249115131&partnerID=8YFLogxK
U2 - 10.1016/j.econmod.2008.08.003
DO - 10.1016/j.econmod.2008.08.003
M3 - Article
AN - SCOPUS:58249115131
VL - 26
SP - 379
EP - 384
JO - Economic Modelling
JF - Economic Modelling
SN - 0264-9993
IS - 2
ER -