Learning, uncertainty and central bank activism in an economy with strategic interactions.
In this paper we examine the optimal level of central bank activism in a standard model of monetary policy with uncertainty, learning and strategic interactions. We calibrate the model using G7 data and find that the presence of strategic interactions between the central bank and private agents crea...
| 主要な著者: | , |
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| フォーマット: | Working paper |
| 言語: | English |
| 出版事項: |
European Central Bank
2000
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| _version_ | 1826306707998900224 |
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| author | Ellison, M Valla, N |
| author_facet | Ellison, M Valla, N |
| author_sort | Ellison, M |
| collection | OXFORD |
| description | In this paper we examine the optimal level of central bank activism in a standard model of monetary policy with uncertainty, learning and strategic interactions. We calibrate the model using G7 data and find that the presence of strategic interactions between the central bank and private agents creates an additional motivation for caution in optimal monetary policy. An active policy designed to help learning and reduce future uncertainty creates extra volatility in inflation expectations, which is detrimental to welfare. |
| first_indexed | 2024-03-07T06:52:03Z |
| format | Working paper |
| id | oxford-uuid:fce0a208-d85f-4fe8-a508-ccd76d1a67be |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T06:52:03Z |
| publishDate | 2000 |
| publisher | European Central Bank |
| record_format | dspace |
| spelling | oxford-uuid:fce0a208-d85f-4fe8-a508-ccd76d1a67be2022-03-27T13:24:28ZLearning, uncertainty and central bank activism in an economy with strategic interactions.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:fce0a208-d85f-4fe8-a508-ccd76d1a67beEnglishDepartment of Economics - ePrintsEuropean Central Bank2000Ellison, MValla, NIn this paper we examine the optimal level of central bank activism in a standard model of monetary policy with uncertainty, learning and strategic interactions. We calibrate the model using G7 data and find that the presence of strategic interactions between the central bank and private agents creates an additional motivation for caution in optimal monetary policy. An active policy designed to help learning and reduce future uncertainty creates extra volatility in inflation expectations, which is detrimental to welfare. |
| spellingShingle | Ellison, M Valla, N Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title | Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title_full | Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title_fullStr | Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title_full_unstemmed | Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title_short | Learning, uncertainty and central bank activism in an economy with strategic interactions. |
| title_sort | learning uncertainty and central bank activism in an economy with strategic interactions |
| work_keys_str_mv | AT ellisonm learninguncertaintyandcentralbankactivisminaneconomywithstrategicinteractions AT vallan learninguncertaintyandcentralbankactivisminaneconomywithstrategicinteractions |