We study the design of optimal monetary policy under uncertainty in a dynamic stochastic general equilibrium models. We … use a Markov jump-linear-quadratic (MJLQ) approach to study policy design, approximating the uncertainty by different … a benchmark New Keynesian model, analyzing how policy is affected by uncertainty, and how learning and active …

dominate, in that public releases increase uncertainty about fundamentals. In some cases, public releases can create or …

We investigate the relationship between uncertainty about monetary policy and its transmission mechanism, and economic …-order effect on their dynamics. The data favors a model with two unspanned volatility factors that capture uncertainty about … monetary policy and the term premium. Uncertainty contributes negatively to economic activity. Two dimensions of uncertainty …

setting, an increase in uncertainty about future shocks causes significant contractions in the economy and may lead to non … outcomes. Fluctuations in uncertainty and the zero lower bound help our model match the unconditional and stochastic volatility …

In this research, we provide new empirical evidence on the importance of time-varying uncertainty for the exchange rate … and the excess return in currency markets. Following an increase in monetary policy uncertainty, the dollar exchange rate …-varying uncertainty aimed at understanding these regularities. In the model, the behaviour of the exchange rate following nominal and real …

We study a novel policy tool—interest rate uncertainty—that can be used to discourage inefficient capital inflows and … identify the trade-offs faced in navigating between external balance and price stability. The interest rate uncertainty policy … the world. Under every scenario, uncertainty policy is inflationary …

) cases, these robust policies are more aggressive than the optimal policies absent model uncertainty. The specific robust … policies depend strongly on the formation of model uncertainty used, and we make some suggestions about which formulation is …

). Finally, this class of rules is robust to model uncertainty, in the sense that a first-difference rule taken from the policy … rules are less robust to model uncertainty: rules with additional parameters can be fine-tuned to the dynamics of a …

-run concept like the natural rate of unemployment. We examine what effect uncertainty has on the use of NAIRU in policy …. Uncertainty about the level of NAIRU does not imply that monetary policy should react less to the NAIRU gap. However, uncertainty … Brainard (1967), uncertainty about the effect of the monetary policy instrument on the NAIRU gap reduces the magnitude of the …