characterized with a continuum from pure discretion to full commitment. Second, we solve the optimal and robust targeting rules when …In the conventional optimal monetary policy framework, two key assumptions underline the full commitment solution … which the private sector expects the commitment regime to end sooner than that is intended by the policy maker. The results …

losses both under discretion and commitment. We compare the performance of unrestricted optimal rules to the performance of … optimal simple rules. The results indicate that there are considerable gains from commitment over discretion, probably due to … the stabilization bias present under discretion. The lagged variant of the Taylor type of rule that allows for interest …

under discretion. Because the growth rate of money is closely related to the change in the interest rate and he growth of …

welfare losses associated with the presence of the zero bound. Under commitment, the gains associated with the use of the …

under discretion. Because the growth rate of money is closely related to the change in the interest rate and he growth of …

under discretion. Because the growth rate of money is closely related to the change in the interest rate and he growth of …

in welfare terms is equivalent to moving from discretion to precommitment, the inflation equivalent. In the estimated …