generalizes the standard commitment concept of Stackelberg leadership by making it dynamic. By letting players move with a certain … monetary union due to free-riding. The bad news is that, unlike under the static commitment of Sargent and Wallace (1981), this … acting as a credible threat of a costly policy tug-of-war, long-term monetary commitment (e.g. a legislated inflation target …

framework for monetary policy deliberations, some of the central themes will be the importance of commitment for a superior … characterizing a central bank's policy commitment. …

. Second, we show that the commitment (time inconsistent) solution does not normally involve zero inflation and output at its …, we show that the timeless perspective policy has the same steady state as the commitment case, but without any short …

optimal monetary and fiscal policies under commitment and discretion. With symmetric rigidities, fiscal policy will not be … rates and the terms of trade. Under commitment, both monetary policy and relative spending are inertial, while this is not … the case under discretion. We conduct numerical analyses to assess the welfare gains from commitment and from having …

better explained as following optimal policy under discretion than under commitment. We estimate policy objectives of both …

We study the existence and uniqueness properties of monetary policy with limited commitment in LQ RE models. We use a … multiple equilibria under pure discretion, and under full commitment there are two distinct determinate regimes. We study how … these properties change over the continuum of intermediate cases between commitment and discretion. We find that although …