EconPapers    
Economics at your fingertips  
 

Robustly Optimal Monetary Policy with Near-Rational Expectations

Michael Woodford ()

No 2007/12, CFS Working Paper Series from Center for Financial Studies

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.

Keywords: Optimal Monetary Policy; Commitment; History-Dependent Policy (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2007-02-19
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.ifk-cfs.de/fileadmin/downloads/publications/wp/07_12.pdf (application/pdf)

Related works:
Journal Article: Robustly Optimal Monetary Policy with Near-Rational Expectations (2010) 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:cfs:cfswop:wp200712

Access Statistics for this paper

More papers in CFS Working Paper Series from Center for Financial Studies Contact information at EDIRC.
Bibliographic data for series maintained by Birgit Pässler ().

 
Page updated 2021-07-22
Handle: RePEc:cfs:cfswop:wp200712