TY  - BOOK
AU  - Schmitt-Grohe,Stephanie
AU  - Uribe,Martin
ED  - National Bureau of Economic Research.
TI  - On Quality Bias and Inflation Targets
T2  - NBER working paper series
PY  - 2009///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - November 2009; Hardcopy version available to institutional subscribers
N2  - A policy  issue central banks are confronted with is whether inflation targets should be adjusted to account for the systematic upward  bias in measured inflation due to quality improvements in consumption goods.  We show that in the context of a Ramsey equilibrium  the answer to this question depends on what prices are assumed to be sticky. If nonquality-adjusted prices are assumed to be  sticky, then the Ramsey plan predicts that  the inflation target should not be corrected. If, on the other hand, quality-adjusted (or hedonic)  prices are assumed to be sticky, then the Ramsey plan calls for raising the inflation target by the magnitude of the bias
UR  - https://www.nber.org/papers/w15505
UR  - http://dx.doi.org/10.3386/w15505
ER  -