Athey, Susan; Atkeson, Andrew; Kehoe, Patrick J. - In: Econometrica 73 (2005) 5, pp. 1431-1475
How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the economy's randomly fluctuating state. The monetary authority has private information about that state. Well...