Most of those who take macro and monetary policy decisions are agents. The worst penalty which can be applied to these agents is to sack them if they are perceived to have failed. To be publicly sacked as a failure is painful, often severely so, but the pain is finite. Agents thus have loss...

Most of those who take macro and monetary policy decisions are agents. The worst penalty which can be applied to these agents is to sack them if they are perceived to have failed. To be publicly sacked as a failure is painful, often severely so, but the pain is finite. Agents thus have loss...

Most of those who take macro and monetary policy decisions are agents.  The worst penalty which can be applied to these agents is to sack them.  Agents thus have loss functions which are bounded above.  We work with a bell loss function which has this property.  With additive uncertainty the...