Levine, Paul; Pearlman, Joseph - In: Journal of Economic Dynamics and Control 34 (2010) 3, pp. 456-471
This paper revisits a widely adopted approach to robust decision making developed by (Hansen and Sargent, 2003) and (Hansen and Sargent, 2008)--henceforth HS--and applies it to monetary policy design in the face of model uncertainty. We pay particular attention to two issues: first, we...