Optimal Time-Invariant Monetary Policy

Charles Brendon

No 463, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper investigates how best to determine time-invariant policy rules in macroeconomic models with forward-looking constraints, where fully optimal policy is known to be time-inconsistent. It proposes a new 'coefficient optimisation' approach that improves upon the timeless perspective method of Woodford (2003) in deterministic problems, and on average in stochastic problems, without resorting to asymptotic ('unconditional') loss comparisons.

Keywords: Timeless perspective; Time consistency; Optimal monetary policy; Time-invariant policy (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 E61 (search for similar items in EconPapers)
Date: 2009-11-01
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:463

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