For many environmental problems regulators are uncertain about both the costs of abatement and the stock-related damages. For example, governments have imperfect information about damages caused by greenhouse gas stocks, and also about the costs of abating greenhouse gas emissions. They acquire...

This paper investigates optimal monetary policy in an economy, in which the output-inflation trade off faced by the central bank is influenced by two important forces: (i) the presence of uncertain and possibly changing parameters, and (ii) private sector expectations regarding the central...