Robust Control and Persistence

in New Keynesian Monetary Policy Analysis - The Influence of Model Uncertainty on optimal Monetary Strategies

Autori

• Michael Paetz

Parametri

• 204 pagine
• 8 ore di lettura

• Scienze politiche & Politica

Maggiori informazioni sul libro

The study explores the impact of model uncertainty and persistent consumption and pricing behavior within New Keynesian models, which integrate rigid price assumptions with modern macroeconomic methods. It examines how central banks set interest rates amidst economic uncertainty using robust control methods to analyze worst-case scenarios. The findings suggest that rule-based monetary policy, relying on influencing economic expectations, can destabilize the economy when uncertainty is unfounded, raising questions about the effectiveness of commitment strategies in monetary policy.

Lingua: Inglese

Pubblicato: 2012

(In brossura)