Aggregate demand shocks, central bank preferences and macroeconomic outcomes with imperfect information

Jonathan G. James and Phillip Lawler

Economics Letters, 2009, vol. 105, issue 3, 208-210

Abstract: Assuming imperfect information regarding aggregate demand shocks, the paper shows: first, the distribution of the impact of such shocks between employment and prices depends crucially on central bank preferences; second, optimal stabilization is achieved by a conservative central banker.

Keywords: Imperfect; information; Demand; shocks; Central; bank; objectives (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:105:y:2009:i:3:p:208-210

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