EconPapers    
Economics at your fingertips  
 

Robustly Optimal Monetary Policy with Near-Rational Expectations

Michael Woodford ()

American Economic Review, 2010, vol. 100, issue 1, 274-303

Abstract: The paper considers optimal monetary stabilization policy in a forward-looking model, when the central bank recognizes that private sector expectations need not be precisely model-consistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs that are close enough to model-consistency. It is found that commitment continues to be important for optimal policy, that the optimal long-run inflation target is unaffected by the degree of potential distortion of beliefs, and that optimal policy is even more history-dependent than if rational expectations are assumed. (JEL C62, D84, E13, E31, E32, E52)

JEL-codes: C62 D84 E13 E31 E32 E52 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/aer.100.1.274
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61) Track citations by RSS feed

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.1.274 (application/pdf)
http://www.aeaweb.org/aer/data/mar2010/20060096_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Robustly Optimal Monetary Policy with Near-Rational Expectations (2007) Downloads
Working Paper: Robustly Optimal Monetary Policy with Near Rational Expectations (2005) Downloads
Working Paper: Robustly optimal monetary policy with near-rational expectations (2005) Downloads
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:aea:aecrev:v:100:y:2010:i:1:p:274-303

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2021-06-15
Handle: RePEc:aea:aecrev:v:100:y:2010:i:1:p:274-303