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Performance of monetary policy with nternal Central Bank forecasting

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Author Info
Seppo Honkapohja () (University of Cambridge - Faculty of Economics and Politics, Austin Robinson Building, Sidgwick Avenue, Cambridge CB3 9DD, United Kingdom.)
Kaushik Mitra () (University of London - Economics, Royal Holloway College, Egham, Surrey TW20 0EX, United Kingdom.)

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Abstract

Recent models of monetary policy have analyzed the desirability of different optimal and ad hoc interest rules under the restrictive assumption that forecasts of the private sector and the central bank are homogenous. In this paper, we study the implications of heterogeneity in forecasts of the central bank and private agents for the performance of interest rules from the learning viewpoint. JEL Classification: E52; E31; D84.

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Publisher Info
Paper provided by European Central Bank in its series Working Paper Series with number 127.

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Length: 54 pages
Date of creation: Feb 2002
Date of revision:
Handle: RePEc:ecb:ecbwps:20020127

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Related research
Keywords: Adaptive learning stability heterogeneity monetary policy.

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References listed on IDEAS
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.:
  1. Richard Clarida & Jordi Gali & Mark Gertler, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December. [Downloadable!] (restricted)
    Other versions:
  2. George W. Evans & Seppo Honkapohja, 2003. "Expectations and the Stability Problem for Optimal Monetary Policies," Review of Economic Studies, Blackwell Publishing, vol. 70(4), pages 807-824, October. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, 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.)

  1. Seppo Honkapohja & Kaushik Mitra, 2006. "Learning Stability in Economies with Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(2), pages 284-309, April. [Downloadable!] (restricted)
    Other versions:
  2. Kauko, Karlo, 2002. "Links between securities settlement systems: An oligopoly theoretic approach," Research Discussion Papers 27/2002, Bank of Finland. [Downloadable!]
  3. Orlando Gomes, . "Volatility, Heterogeneous Agents and Chaos," The Electronic Journal of Evolutionary Modeling and Economic Dynamics, IFReDE - Université Montesquieu Bordeaux IV. [Downloadable!]
    Other versions:
  4. Gomes, O. & Mendes, D. A. & Mendes, V. P. & Sousa Ramos, J., 2007. "Endogenous Cycles in Optimal Monetary Policy with a Nonlinear Phillips Curve," Money Macro and Finance (MMF) Research Group Conference 2006 139, Money Macro and Finance Research Group. [Downloadable!]
  5. Ichiro Muto, 2007. "Productivity Growth, Transparency, and Monetary Policy," IMES Discussion Paper Series 07-E-08, Institute for Monetary and Economic Studies, Bank of Japan. [Downloadable!]
  6. George W. Evans & Bruce McGough, 2005. "Optimal Constrained Interest-rate Rules," University of Oregon Economics Department Working Papers 2005-9, University of Oregon Economics Department, revised 31 May 2006. [Downloadable!]
    Other versions:
  7. Rantala, Anssi, 2003. "Adaptive learning and multiple equilibria in a natural rate monetary model with unemployment persistence," Research Discussion Papers 30/2003, Bank of Finland. [Downloadable!]
  8. G. C. Lim & Paul D. McNelis, 2006. "Inflation Targeting, Learning and Q Volatility in Small Open Economies," Melbourne Institute Working Paper Series wp2006n22, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
    Other versions:
  9. Ichiro Muto, 2008. "Monetary Policy and Learning from the Central Bank's Forecast," IMES Discussion Paper Series 08-E-01, Institute for Monetary and Economic Studies, Bank of Japan. [Downloadable!]
  10. Mikko Niskanen, 2004. "Lender of last resort and the moral hazard problem," Macroeconomics 0405016, EconWPA. [Downloadable!]
  11. Martin Fukac, 2008. "Heterogeneous Expectations, Adaptive Learning,and Forward-Looking Monetary Policy," Reserve Bank of New Zealand Discussion Paper Series DP2008/07, Reserve Bank of New Zealand. [Downloadable!]
  12. Kaushik Mitra & Seppo Honkapohja, 2004. "Monetary Policy with Internal Central Bank Forecasting: A Case of Heterogenous Information," Royal Holloway, University of London: Discussion Papers in Economics 04/16, Department of Economics, Royal Holloway University of London, revised Jul 2004. [Downloadable!]
  13. Matti Keloharju & Markku Malkamäki & Kjell G. Nyborg & Kristian Rydqvist, 2004. "A descriptive analysis of the Finnish treasury bond market 1991–1999," Finance 0405017, EconWPA. [Downloadable!]
    Other versions:
  14. Granlund , Peik, 2002. "Bank exit legislation in US, EU and Japanese financial centres," Research Discussion Papers 25/2002, Bank of Finland. [Downloadable!]
  15. Evans , George W & Honkapohja, Seppo, 2007. "Expectations, learning and monetary policy: an overview of recent research," Research Discussion Papers 32/2007, Bank of Finland. [Downloadable!]
    Other versions:
  16. Jasmina Arifovic & James B. Bullard & Olena Kostyshyna, 2007. "Social learning and monetary policy rules," Working Papers 2007-007, Federal Reserve Bank of St. Louis. [Downloadable!]
  17. Rosal, Joao Mauricio & Spagat, Michael, 2002. "Structural Uncertainty and Central Bank Conservatism: The Ignorant Should Keep Their Eyes Shut," CEPR Discussion Papers 3568, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  18. Peik Granlund, 2004. "Bank exit legislation in US, EU and Japanese financial centres," Finance 0405015, EconWPA. [Downloadable!]
  19. Orlando Gomes, 2004. "Optimal Monetary Policy under Heterogeneous Expectations," Macroeconomics 0409023, EconWPA. [Downloadable!]
  20. Karlo Kauko, 2004. "Links between securities settlement systems: An oligopoly theoretic approach," Industrial Organization 0405003, EconWPA. [Downloadable!]
  21. Martin Fukac, 2006. "New Keynesian Model Dynamics under Heterogeneous Expectations and Adaptive Learning," Working Papers 2006/5, Czech National Bank, Research Department. [Downloadable!]
  22. Anssi Rantala, 2004. "Adaptive learning and multiple equilibria in a natural rate monetary model with unemployment persistence," GE, Growth, Math methods 0404005, EconWPA. [Downloadable!]
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