000			01600cam a2200193 4500500
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041			_afre
042			_adc
100	1	0	_aBac, Catherine _eauthor
245	0	0	_aThe Trade-off between Fluctuations in Inflation and Output in the Eurozone
260			_c2001.
500			_a33
520			_aThis study estimates the long-term trade-off between variance of inflation and variance of output facing the European monetary authorities. When the central bank pursues inflation and output gap objectives, its choice represents the limit of optimum monetary policy. A structural VAR model is used to determine a rule for optimum monetary policy. By modifying the weighting of the stabilisation objectives for growth and inflation fluctuations, respectively, we can empirically determine a long-term trade-off between the two. Application to the European series shows that monetary policy is more effective in controlling inflation than output. There seems in particular to be an incompressible threshold below which it is impossible to reduce the output variance. Moreover, the trade-off becomes very tight when the variance of inflation drops below 1%. This result suggests that when inflation is the only concern of the central bank, the output variance can be expected to be high.
690			_abased models
690			_amonetary policy
690			_astructural autoregressive vector
786	0		_nEconomie & prévision | o 150 | 4 | 2001-08-01 | p. 47-58 | 0249-4744
856	4	1	_uhttps://shs.cairn.info/journal-economie-et-prevision-1-2001-4-page-47?lang=en
999			_c157589 _d157589