A Theory of Fed Watching in a Macroeconomic Policy Game

Nathan Balke and Joseph Haslag

International Economic Review, 1992, vol. 33, issue 3, 619-28

Abstract: This paper examines the phenomenon of "Fed watching" within the context of a macroeconomic policy game. Following A. Cukierman and A. H. Meltzer's 1986 article, the policymaker's preferences are private information and noisy monetary control causes past observations of money growth to be a noisy signal of the monetary authority's future intentions. Individuals are allowed to acquire additional information about the monetary authority's preferences. Thus, both past observations of money growth and costly information about the policymaker's preferences are used by agents in forming expectations about policy. The public's acquisition of information alters the monetary authority's strategic calculus, making noisy monetary control less desirable. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://links.jstor.org/sici?sici=0020-6598%2819920 ... O%3B2-O&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:ier:iecrev:v:33:y:1992:i:3:p:619-28

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and ().