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The case for an independent central bank is becoming increasingly accepted. This new orthodoxy is based on three … on the inflationary bias of discretionary policy-making; and the empirical academic literature on central bank …. ; Second we present a theoretical model which allows us to consider the optimal degree of inflation aversion of the central …
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This paper uses Whiteman's(1986) frequency-domain optimization methodology to parameterize the precommitment period in a standard rational expectations policy design model. This allows researchers to adopt an empirical approach to the time consistency issue. That is, the operative commitment...
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