Reports from Federal Reserve Bank of Cleveland Provide New Insights into Technology (Output-inflation Trade-offs and the Optimal Inflation Rate): Technology

2024 SEP 17 (NewsRx) -- By a News Reporter-Staff News Editor at Tech Daily News -- New research on Technology is the subject of a report. According to news originating from Cleveland, Ohio, by NewsRx correspondents, research stated, “We show that a positive superelasticity of demand, often referred to as ‘Marshall’s Second Law of Demand,’ is a new push factor of optimal inflation in staggered price models.”

Our news journalists obtained a quote from the research from the Federal Reserve Bank of Cleveland, “The positive superelasticity alters the trade-offs between output and inflation in the models. It allows higher trend inflation to steepen the slope of a model-based Phillips curve and lower the steady-state average markup, and thus reduces the inflation-related weight in a model-based welfare function for higher trend inflation and the steady-state welfare cost of higher trend inflation.”

According to the news editors, the research concluded: “Consequently, the positive superelasticity can make the optimal trend inflation rate positive and lessen the welfare difference between inflation targets of 2 percent and 4 percent.”

This research has been peer-reviewed.

For more information on this research see: Output-inflation Trade-offs and the Optimal Inflation Rate. Journal of Economic Dynamics and Control, 2024;164. Journal of Economic Dynamics and Control can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Economic Dynamics and Control - http://www.journals.elsevier.com/journal-of-economic-dynamics-and-control/)

The news correspondents report that additional information may be obtained from Willem Van Zandweghe, Federal Reserve Bank of Cleveland, Dept. of Research, Pob 6387, Cleveland, OH 44101, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jedc.2024.104874. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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