Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)

Research on the Inflation Cost Evaluation and Appropriate Inflation Management Based on the Taylor Rule

Authors
Shiqing Sheng1, *
1University of St. Andrews, St. Andrews, UK
*Corresponding author. Email: shengshiqing@126.com
Corresponding Author
Shiqing Sheng
Available Online 14 December 2022.
DOI
10.2991/978-94-6463-054-1_60How to use a DOI?
Keywords
Real money balance; Menu cost; Price level target; Zero inflation target; Taylor rule
Abstract

Inflation has a number of negative effects, including the potential for reducing investment and slowing economic development due to volatility and uncertainty. Inflation can reduce an individual's savings value and shift the income away from savers to lenders and people with assets in society. When inflation reaches dangerously high levels, society can become unstable and people's faith in the economy might be lost. This paper evaluates the costs of inflation and how to manage inflation in an appropriate way by introducing the Taylor rule, a targeting monetary policy used by central banks to control inflation. According to the Taylor Rule, the Federal Reserve should raise rates when inflation exceeds the desired level or when GDP growth exceeds its potential.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
14 December 2022
ISBN
10.2991/978-94-6463-054-1_60
ISSN
2352-5428
DOI
10.2991/978-94-6463-054-1_60How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

TY  - CONF
AU  - Shiqing Sheng
PY  - 2022
DA  - 2022/12/14
TI  - Research on the Inflation Cost Evaluation and Appropriate Inflation Management Based on the Taylor Rule
BT  - Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)
PB  - Atlantis Press
SP  - 558
EP  - 565
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-054-1_60
DO  - 10.2991/978-94-6463-054-1_60
ID  - Sheng2022
ER  -