The reason why divine coincidence simplifies the task of policymakers. Concept introduction: Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Question

Want to see the full answer?

Answer 1

Question

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 2

Question

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Answer 6

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Answer 7

Chapter 24, Problem 5Q

To determine

To Explain:

The reason why divine coincidence simplifies the task of policymakers.

Concept introduction:

Divine Coincidence: Olivier Blanchard and Jordi Galí in 2005 defined the concept of divine coincidence. It means that there is no trade-off between the stabilization of inflation and the stabilization of the output gap for central banks. It signifies the absence of real imperfections like real wage rigidities. It implies that output gap can be brought to zero by controlling inflation, and there is no need to have separate targets for both.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 24 - Prob. 1LO Ch. 24 - Prob. 2LO Ch. 24 - Prob. 3LO Ch. 24 - Prob. 4LO Ch. 24 - Prob. 5LO Ch. 24 - Prob. 1Q Ch. 24 - Prob. 2Q Ch. 24 - Prob. 3Q Ch. 24 - Prob. 4Q Ch. 24 - Prob. 5Q

Want to see the full answer?

Chapter 24 Solutions