Journal article icon

Journal article

Learning, uncertainty and central bank activism in an economy with strategic interactions.

Abstract:
In this paper we examine the optimal level of central bank activism in a standard model of monetary policy with uncertainty, learning and strategic interactions. We calibrate the model using G7 data and find that the presence of strategic interactions between the central bank and private agents creates an additional motivation for caution in optimal monetary policy. An active policy designed to help learning and reduce future uncertainty creates extra volatility in inflation expectations, which is detrimental to welfare.

Actions


Access Document


Authors


Martin Ellison More by this author
Natacha Valla More by this author
Journal:
Journal of Monetary Economics
Volume:
48
Issue:
1
Publication date:
2001
DOI:
URN:
uuid:0be6d615-16eb-4f4e-9149-9626d1f24c2e
Local pid:
oai:economics.ouls.ox.ac.uk:15139
Language:
English

Terms of use


Metrics



If you are the owner of this record, you can report an update to it here: Report update to this record

TO TOP