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1 décembre 2011
- handle: 10670/1.uj5ncp
info:eu-repo/semantics/openAccess
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inflation growth stochastic modelsSujets proches
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Isela Elizabeth Téllez-León et al., « Inflation Volatility and Growth in a Stochastic Small Open Economy: A Mixed Jump-Diffusion Approach », Economía: teoría y práctica, ID : 10670/1.uj5ncp
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The aim of this paper is to examine how inflation volatility affects economic growth in a small open economy. To reach this goal, a stochastic macroeconomic model with a financial sector and incomplete financial markets (due to the inclusion of jumps) is developed. It is assumed that the general price level is driven by mixed diffusion-jump process, that is, a Brownian motion governs inflation and a Poisson process guides unexpected and sudden jumps in the price index. The economic growth rate is endogenously determined, in the equilibrium, as a function of parameters of the inflation process.