Monetary Uncertainty, the Appropriate Choice of Central Banker and Social Welfare
AbstractA number of papers have identified the possibility that less precise monetary control or, alternatively, increased uncertainty with regards to the effects of monetary policy on the economy may enhance social welfare. The present paper introduces monetary uncertainty into a model of monetary policy delegation. It is shown that an increase in uncertainty has an ambiguous effect on the appropriate degree of conservatism of an optimally chosen central banker, but produces an unambiguous fall in welfare.
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Bibliographic InfoArticle provided by Economic Issues in its journal Economic Issues.
Volume (Year): 9 (2004)
Issue (Month): 2 (September)
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- Letterie, Wilko, 1997.
" Better Monetary Control May Decrease the Distortion of Stabilisation Policy: A Comment,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 99(3), pages 463-70, September.
- Letterie, Wilko, 1997. "Better monetary control may decrease the distortion of stabilisation policy: a comment," Open Access publications from Maastricht University urn:nbn:nl:ui:27-20500, Maastricht University.
- Swank, Otto H, 1994. " Better Monetary Control May Increase the Inflationary Bias of Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(1), pages 125-31.
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