On Optimal Contracts for Central Bankers and Inflation and Exchange-Rate-Targeting Regimes.
This paper analyzes the issues of discretion and commitment in monetary policy under an exchange rate-targeting regime. Neither a linear state-contingent inflation contract for the central bank nor an explicit state-contingent inflation target combined with a weight-conservative central bank can now achieve the commitment equilibrium. It is shown that a state-contingent contract conditioned on the exchange rate and past output can implement the commitment equilibrium. Contracts conditioned on the exchange rate and inflation and on inflation and past output can also mimic the optimal rule under commitment.
Year of publication: |
2002
|
---|---|
Authors: | Ratti, Ronald A |
Published in: |
Journal of Money, Credit and Banking. - Blackwell Publishing. - Vol. 34.2002, 3, p. 678-85
|
Publisher: |
Blackwell Publishing |
Saved in:
Saved in favorites
Similar items by person
-
Commodity Prices and BRIC and G3 Liquidity: A SFAVEC Approach
Ratti, Ronald A, (2013)
-
Crude Oil Prices: China’s Influence Over 1996-2011
Ratti, Ronald A, (2012)
-
Chinese monetary expansion and the U.S. economy
Vespignani, Joaquin L., (2013)
- More ...