Optimal Monetary Policy Inertia

Michael Woodford

Working Papers from Stockholm - International Economic Studies

Abstract: The first section of this paper presents a model of the economy and poses the problem of optimal monetary policy. The second characterizes the responses of endogenous variables, including nominal interest rates, to shocks under an optimal regime, and highlights the advantages of commitment, by contrasting the optimal responses with those that would result from optimization under discrestion. Then, the next section considers the optimal assignment of an objective to a central bank with instrument but not goal) independence, that is expected to pursue its assigned goal under discretion. The last section considers the form of interest rate feedback rule that can achieve the desired dynamic responses to chocks, if the central bank's commitment to such a rule is credible. to the private sector.

Keywords: MONETARY POLICY; CENTRAL BANKS; MACROECONOMICS (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 90 pages
Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (719)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Optimal Monetary Policy Inertia (2000)
Journal Article: Optimal Monetary Policy Inertia (1999)
Journal Article: Optimal monetary policy inertia (1999)
Working Paper: Optimal Monetary Policy Inertia (1999)
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:fth:stocin:666

Access Statistics for this paper

More papers in Working Papers from Stockholm - International Economic Studies UNIVERSITY OF STOCKHOLM, INSTITUTE FOR INTERNATIONAL ECONOMIC STUDIES, S- 106 91 STOCKHOLM SWEDEN.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().