Monetary Policy in an Uncertain Environment

Martin S. Feldstein

No 9969, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper discusses the nature of the uncertainty faced by central banks and considers three approaches to dealing with uncertainty(1) formal optimization models and robust rules based on such models; (2) informal rules like the Taylor rule and inflation targeting; and (3) a case by case approach based on an informal Bayesian logic. The latter case requires considering the asymmetric nature of the risks that the central bank often faces.

JEL-codes: E5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-mon
Date: 2003-09
Note: ME
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