The Time Inconsistency of Monetary Policy with Inflation Persistence.
In a monetary policy model incorporating partial persistence in inflation it is shown that inflation bias is reduced and the response to shocks improved if the policy maker has a discount rate lower than its true social value. Thus a patient central banker is shown to be a third mechanism for offset...
| Main Author: | |
|---|---|
| Format: | Working paper |
| Language: | English |
| Published: |
Department of Economics (University of Oxford)
2000
|