Robust monetary policy, optimal delegation and misspecified potential output

Central banks face uncertainty about potential output. We model optimal monetary policy under discretion in a situation in which the central bank adopts a min–max approach to policy. The case for appointing a conservative central banker who puts a larger weight on inflation stabilization becomes stronger as the central bank’s concern about misspecifications increases.

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Year of publication:	2014
Authors:	Tillmann, Peter
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 123.2014, 2, p. 244-247
Publisher:	Elsevier
Subject:	Monetary policy \| Potential output \| Robust control \| Knightian uncertainty \| Monetary delegation

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Type of publication:	Article
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E31 - Price Level; Inflation; Deflation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010906373