On the unimportance of commitment for monetary policy

Juan Paez-Farrell

Papers from arXiv.org

Abstract: In a New Keynesian model where the trade-off between stabilising the aggregate inflation rate and the output gap arises from sectoral asymmetries, the gains from commitment are either zero or negligible. Thus, to the extent that economic fluctuations are caused by sectoral shocks, policies designed to overcome the stabilisation bias are aiming to correct an unimportant problem.

Date: 2023-08, Revised 2023-08
New Economics Papers: this item is included in nep-dge and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2308.08044 Latest version (application/pdf)

Related works:
Working Paper: On the Unimportance of Commitment for Monetary Policy (2023)
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:arx:papers:2308.08044

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().