Learnability and transparency with time inconsistent monetary policy

Learnability and transparency with time inconsistent monetary policy

In the canonical time inconsistency model of monetary policy the rational expectations equilibrium is expectationally stable. Central bank transparency is undesirable if and only if the private sector's initial inflation forecast is in a certain interval near the equilibrium inflation.

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Bibliographische Detailangaben
Veröffentlicht in:Economics letters 2005-05, Vol.87 (2), p.187-191
1. Verfasser: Cone, Thomas E.
Format: Artikel
Sprache:eng
Schlagworte:
Central banks
E-stability
Economic forecasts
Economics
Inflation
Learnability
Monetary policy
Private sector
Time inconsistency
Transparency
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Beschreibung
Zusammenfassung:In the canonical time inconsistency model of monetary policy the rational expectations equilibrium is expectationally stable. Central bank transparency is undesirable if and only if the private sector's initial inflation forecast is in a certain interval near the equilibrium inflation.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2004.12.001