Monetary Policy With Uncertain Central Bank Preferences

Anne Sibert

No 3113, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: ?This Paper considers monetary policy when the weight policy makers put on output loss relative to inflation is their private information. I show that in the first period of a two-period term, all policy makers but the least inflation averse inflate less ? but respond more to shocks ? than if there were no private information. Moderately inflation-averse policy makers may reduce their inflation most. A tendency toward increased conservatism in their second period increases inflation in the first. The model is extended to T-period terms, T

Keywords: Monetary policy; Signalling (search for similar items in EconPapers)
JEL-codes: E58 (search for similar items in EconPapers)
Date: 2001-12
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Citations: View citations in EconPapers (3)

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