00000nam 2200000za 4500 9.824692 CaOODSP 20250821075057 cr ||||||||||| 160923s2016 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-7/2016-14E-PDF Amano, Robert A. A primer on neo-Fisherian economics [electronic resource] / by Robert Amano, Thomas Carter and Rhys Mendes. [Ottawa] : Bank of Canada, c2016. iii, 8 p. : graphs. Staff analytical note, 2369-9639 ; 2016-14 "September 2016." Includes bibliographic references. "Conventional models imply that central banks aiming to raise inflation should lower nominal rates and thus stimulate aggregate demand. However, several economists have recently challenged this conventional wisdom in favour of an alternative “neo-Fisherian’’ view under which higher nominal rates might in fact lead to higher inflation. In this note, we show that a simple New Keynesian model can indeed deliver a neo-Fisherian link from higher nominal rates to higher inflation. However, the conditions under which this link emerges include a configuration of fiscal and monetary policy, which departs substantially from the configuration normally assumed in the New Keynesian literature. In particular, this configuration involves a commitment that the central bank will not respond too aggressively if inflation is off target, in the sense that policy will be set in a manner inconsistent with the Taylor principle. Active use of inflation to manage real government debt would also be needed. We identify significant challenges associated with both these conditions and argue that they militate against policies that aim to exploit the neo-Fisherian mechanism"--Abstract, p.ii. Text in English, abstract in English and French. gccst Inflation gccst Economic analysis Carter, Thomas. Mendes, Rhys R. Bank of Canada. Staff analytical note (Bank of Canada) 2369-9639 ; 2016-14 (CaOODSP)9.807323 PDF 424 KB https://publications.gc.ca/collections/collection_2016/banque-bank-canada/FB3-7-2016-14-eng.pdf