How Conservative Does The Central Banker Have To Be? On The Treatment Of Expectations Under Discretionary Policymaking
AbstractThis paper explores an issue that arises in the delegation process. The paper shows that a myopic central banker, one who treats expectations as constant in setting discretionary policy, can replicate the behaviour of output and inflation under policy from a timeless perspective. For that to happen, society must delegate a price level target or a speed limit policy to a central banker who is more weight-conservative than society. Copyright 2009 The Author. Journal compilation 2009 Blackwell Publishing Ltd/University of Adelaide and Flinders University.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Australian Economic Papers.
Volume (Year): 48 (2009)
Issue (Month): 1 (03)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0004-900X
Other versions of this item:
- Alfred V. Guender, 2007. "How Conservative Does the Central Banker Have to Be? On the Treatment of Expectations under Discretionary Policymaking," Working Papers in Economics 07/04, University of Canterbury, Department of Economics and Finance.
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bennett T. McCallum & Edward Nelson, 2000.
"Timeless Perspectives vs. Discretionary Monetary Policy In Forward-Looking Models,"
NBER Working Papers
7915, National Bureau of Economic Research, Inc.
- Bennett T. McCallum & Edward Nelson, 2004. "Timeless perspective vs. discretionary monetary policy in forward-looking models," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 43-56.
- McCallum, Bennett T & Nelson, Edward, 2001. "Timeless Perspective Vs Discretionary Monetary Policy in Forward-Looking Models," CEPR Discussion Papers 2752, C.E.P.R. Discussion Papers.
- Michael Woodford, 1999. "Commentary : how should monetary policy be conducted in an era of price stability?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 277-316.
- Jensen, Henrik, 1999.
"Targeting Nominal Income Growth or Inflation?,"
CEPR Discussion Papers
2341, C.E.P.R. Discussion Papers.
- McCallum, Bennett T., 1983.
"On non-uniqueness in rational expectations models : An attempt at perspective,"
Journal of Monetary Economics,
Elsevier, vol. 11(2), pages 139-168.
- Bennett T. McCallum, 1983. "On Non-Uniqueness in Rational Expectations Models: An Attempt at Perspective," NBER Working Papers 0684, National Bureau of Economic Research, Inc.
- Vestin, David, 2000. "Price-level Targeting versus Inflation Targeting in a Forward-looking Model," Working Paper Series 106, Sveriges Riksbank (Central Bank of Sweden).
- repec:fip:fedfap:2001-09 is not listed on IDEAS
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