In noise we trust? Optimal monetary policy with random targets

Ethan Cohen-Cole () and Bogdan Cosmaciuc

No 06-14, Working Papers from Federal Reserve Bank of Boston

Abstract: We show that a monetary policy in which the central bank commits to a randomized inflation target allows for potentially faster-expectations convergence than with a fixed target. The randomized target achieves faster convergence in particular in transition environments: those demonstrating either particularly high or low inflation. ; Quantitative Analysis Unit Working Paper QAU07-1

Keywords: Monetary; policy (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.bostonfed.org/economic/wp/wp2006/wp0614.htm (text/html)
http://www.bostonfed.org/economic/wp/wp2006/wp0614.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:06-14

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().