English, Article, Journal or magazine article edition: The reputational constraint on monetary policy John Whittaker

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/59489
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • The reputational constraint on monetary policy
Author
  • John Whittaker
Physical Description
  • preprint
Notes
  • In the context of a standard model of optimal monetary policy, I argue that expectations should be treated as adaptive rather than rational. This argument is justified by considering the rational expectations equilibrium of this model as the limit point of a sequence in which agents progressively modify their forecasts of inflation to make them efficient. I show that this learning process is unlikely to occur, in real time, because of the large amount of data that would be required. When expectations are adaptive, there is no longer a time-inconsistency problem, and since inflation policy influences expectations of future inflation, the central bank s concern for its reputation induces it to deliver optimal (time-consistent) policy. In a final section, the implications of these results for central bank independence are discussed.
  • RePEc:lan:wpaper:000038
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment