EconPapers    
Economics at your fingertips  
 

Credibility and Monetary Policy

Jean Barthélemy and Eric Mengus

Working Papers from HAL

Abstract: This paper investigates the ability of monetary policy rules to coordinate private agents' expectations when the enforcement of rules is limited. We show that limited enforcement precludes diverging inflation paths ensuring that nominal variables remain bounded in equilibrium. When applied to Taylor rules, this makes the Taylor principle necessary and sufficient for price determinacy when agents expect a Taylor rule. However, limited enforcement also allows agents to rationally anticipate multiple policies and we show that, in general, there is no policy rule able to recoordinate any private agents' belief on that rule. We finally provide conditions under which such recoordination may take place.

Keywords: Policy rules; determinacy; limited enforcement (search for similar items in EconPapers)
Date: 2017-05-03
References: Add references at CitEc
Citations:

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

Related works:
Working Paper: Credibility and Monetary Policy (2017) Downloads
Working Paper: Credibility and Monetary Policy (2017) 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:hal:wpaper:hal-01970733

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-22
Handle: RePEc:hal:wpaper:hal-01970733