Discretion rather than rules: Equilibrium uniqueness and forward guidance with inconsistent optimal plans
| Autor: | Jacob Weber, Jeffrey R. Campbell |
|---|---|
| Přispěvatelé: | Econometrics and Operations Research, Research Group: Econometrics |
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
Determinacy media_common.quotation_subject Keynesian economics 05 social sciences Monetary policy Discretion Forward guidance Interest rate Ramsey problem 0502 economics and business New Keynesian economics Economics Uniqueness 050207 economics 050205 econometrics media_common |
| Zdroj: | Review of Economic Dynamics, 41, 243-254. Academic Press Inc. |
| ISSN: | 1094-2025 |
| Popis: | New Keynesian economies with active interest rate rules gain equilibrium determinacy from the central bank's incredible off-equilibrium-path promises ( Cochrane, 2011 ). We suppose instead that the central bank sets interest rate paths and occasionally has the discretion to change them. With empirically-reasonable frequencies of central bank reoptimization, the monetary policy game has a unique symmetric Markov-perfect equilibrium wherein forward guidance influences current outcomes without displaying a forward guidance puzzle. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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