productivity shocks, wage rigidity, and two-sided lack of commitment. Due to the non-Coasean nature of labor contracts, inefficient …

policy rules and of the optimal unconstrained rule under commitment. The study reaches two main conclusions. First, inflation … the performance of the optimal rule under commitment. The optimal speed limit rule is also characterised by super …

The objectives of this paper are: first, to quantify the stabilization welfare gains from commitment; second, to … examine how commitment to an optimal rule can be sustained as an equilibrium and third, to find a simple interest rate rule … that closely approximates the optimal commitment one. We utilize an influential empirical micro-founded DSGE model, the …

'utility. The optimal deterministic steady state under commitment is the Friedman rule - even of the importance assigned to the …

Conventional wisdom says that commitment eliminates the inflationary bias of monetary policy. However, this paper shows …

as possible in the case of any beliefs that are close enough to model-consistency. It is found that commitment continues …

a discretionary policymaker, and a policymaker, who acts under commitment to the optimal interest rate response … uncertainty for a given persistence level. Additionally, the study illustrates that monetary policy under commitment is a policy … on the razor’s edge with respect to uncertainty, since commitment can be destabilizing, when the fear against model …