Title of article :
Robustlyoptimalmonetarypolicyinamicrofounded
NewKeynesianmodel
Author/Authors :
Klaus Adam، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2012
Abstract :
We consideroptimalmonetarystabilizationpolicyinaNewKeynesianmodelwith
explicitmicrofoundations,whenthecentralbankrecognizesthatprivate-sector
expectationsneednotbepreciselymodel-consistent,andwishestochooseapolicy
thatwillbeasgoodaspossibleinthecaseofanybeliefscloseenoughtomodel-
consistency.Weshowhowtocharacterizerobustlyoptimalpolicywithoutrestricting
considerationaprioritoaparticularparametricfamilyofcandidatepolicyrules.We
show thatrobustlyoptimalpolicycanbeimplementedthroughcommitmenttoatarget
criterioninvolvingonlythepathsofinflationandasuitablydefinedoutputgap,butthat
a concernforrobustnessrequiresgreaterresistancetosurpriseincreasesininflation
thanwouldbeconsideredoptimalifonecouldcountontheprivatesectortohave
‘‘rationalexpectations.’’
Keywords :
Robust controlNear-rational expectationsBelief distortionsTarget criterion
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
