Economics at your fingertips  

Transmission lags and optimal monetary policy

Juha Kilponen () and Kai Leitemo ()

Post-Print from HAL

Abstract: The credibility problems of monetary policy are enlarged by transmission lags whenever the welfare criterion consists of arguments with differing transmission lags. If, as usually argued, prices react to monetary policy with a longer lag than output, the discretionary bias is substantially increased under a consumer welfare maximizing policy criterion (flexible inflation targeting) in the prototype New Keynesian model. Money growth targeting can significantly reduce the discretionary bias, but is not robust to other specifications of welfare with higher valuation of output stability.

Keywords: Discretion; and; stabilization; bias (search for similar items in EconPapers)
Date: 2011-01-26
Note: View the original document on HAL open archive server:
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in Journal of Economic Dynamics and Control, Elsevier, 2011, 35 (4), pp.565. ⟨10.1016/j.jedc.2010.12.011⟩

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Transmission lags and optimal monetary policy (2011) 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:

DOI: 10.1016/j.jedc.2010.12.011

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2022-10-17
Handle: RePEc:hal:journl:hal-00781343