Title of article
Optimalsustainablemonetarypolicy
Author/Authors
TakushiKurozumi ، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
13
From page
1277
To page
1289
Abstract
In recentmonetarypolicyliterature,optimalcommitmentpolicyanditsvariantfroma
timelessperspectivehavebeenstudiedwithemphasisonwelfaregainsfrompolicy
commitment.Thesepolicies,however,involveatime-consistencyproblemcalleda
stabilizationbias in forward-lookingmodels.WeanalyzeChariandKehoe’s[1990.
Sustainableplans.JournalofPoliticalEconomy98,783–802]sustainableequilibrium
and examine optimalsustainablepolicy, i.e.apolicymaker’sstrategyinthebest
sustainableequilibrium.Thispapershowsthatsuchapolicybecomesconsistentwith
the optimalcommitmentpolicyinsufficientlylaterperiods.Italsoshowsthatwhether
the optimalsustainablepolicycanattaintheRamseyequilibriumoutcomedependson
the magnitudeofshockshittingthemodeleconomy.Moreover,thepaperfindsa
sustainablepolicythatattainshighersocialwelfarethandiscretionarypolicydoes
Keywords
Optimal monetarypolicyTime-consistencyproblemStabilizationbiasSustainable equilibriumSustainability constraint
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846248
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