Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5055472 | Economic Modelling | 2011 | 9 Pages |
Abstract
⺠This paper analyses the nexus between inflation and its uncertainty in the post float era. ⺠It uses a Markov regime switching model to capture the long-run stochastic trend and the short-run noisy components. ⺠The results show that in the post-float period there is significant deviation from the mainstream Friedman paradigm on inflation and its uncertainty. ⺠The paper also reviews the plausibility of rival paradigms to explain this paradoxical behaviour. ⺠These results may help the authorities in designing the monetary policy to combat the adverse effects of inflation and inflation uncertainty for Australia.
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Authors
Neil Dias Karunaratne, Ramprasad Bhar,