EconPapers    
Economics at your fingertips  
 

OPTIMAL TERM LENGTH FOR AN OVERCONFIDENT CENTRAL BANKER

Etienne Farvaque () and Norimichi Matsueda ()

The Singapore Economic Review (SER), 2017, vol. 62, issue 01, 179-192

Abstract: This paper discusses the implications of overconfidence when it affects a monetary policy maker. We consider two forms of overconfidence: the illusion of precision and the illusion of control. Incorporating them into a standard New Keynesian framework, we consider the optimal term length of a central banker and examine how it depends on the types and degrees of overconfidence. In particular, we show that the legal mandate should always be lengthened when these two types of biases increase by the same percentage magnitude.

Keywords: Central banker; overconfidence; legal mandate; optimal term length (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590816500107
Access to full text is restricted to subscribers.

Related works:
Working Paper: Optimal term length for an overconfident central banker (2017)
Working Paper: Optimal Term Length for an Overconfident Central Banker (2013) 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:wsi:serxxx:v:62:y:2017:i:01:n:s0217590816500107

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590816500107

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().

 
Page updated 2019-04-09
Handle: RePEc:wsi:serxxx:v:62:y:2017:i:01:n:s0217590816500107