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A hybrid inflation/price-level target combines elements of both inflation and price-level targets. The paper derives a hybrid target within a new Keynesian model with inflation persistence due to price indexation. The result generalizes a result by Vestin (2005) that the optimal policy could be...
Persistent link: https://www.econbiz.de/10012143640
This paper proposes a method and a toolkit for solving optimal policy with imperfect commitment in linear quadratic … monetary policy. We apply our method to the Smets and Wouters (2007) model, where we show that imperfect commitment has …
Persistent link: https://www.econbiz.de/10012143759
Economic institutions encompassing increasingly sophisticated concepts of risk-sharing and liability flourished in Europe since the High Middle Ages. These innovations occurred in an environment of fragmented local jurisdictions, not within the framework of the territorial state. In this short...
Persistent link: https://www.econbiz.de/10005870503
constraints, limited foresight, and partial commitment. …
Persistent link: https://www.econbiz.de/10010284143
used as commitment devices when it is impossible to commit not to renegotiate them. We characterize renegotiation …
Persistent link: https://www.econbiz.de/10010500254
optimal contracts with and without commitment and derive an exclusion restriction that is useful to identify the relevant … commitment scenario. The empirical analysis takes advantage of a data set from Spanish soccer player contracts. Our test rejects … the commitment hypothesis, which entails the acceptance of the existence of contractual incompleteness in the data. We …
Persistent link: https://www.econbiz.de/10010263264
is driven by exogenous technology shocks. We first consider the commitment case, and characterize the Ramsey equilibrium … positively correlated with production. Then, we relax the commitment assumption, and we show how to determine numerically whether …, Commitment, Time-consistency, Ramsey equilibrium, Markov perfect equilibria, Sustainable equilibria. …
Persistent link: https://www.econbiz.de/10010263265
We introduce opportunities for pre-play communication and to enter binding or non-binding contracts in trust games, and find (a) communication increases trusting and trustworthiness, (b) contracts are unnecessary for trusting and trustworthy behaviors and are eschewed by many players, (c) more...
Persistent link: https://www.econbiz.de/10010318895
We let subjects interact with anonymous partners in trust (investment) games with and without one of two kinds of pre-play communication: numerical (tabular) only, and verbal and numerical. We find that either kind of pre-play communication increases trusting, trustworthiness, or both, in...
Persistent link: https://www.econbiz.de/10010318961
, optimal monetary policy under commitment is associated with a determinate rational expectations equilibrium that is stable …
Persistent link: https://www.econbiz.de/10010321433