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Optimal Inflation Targets, “Conservative” Central Banks, and Linear Inflation Contracts: Comment Author info | Abstract | Publisher info | Download info | Related research | Statistics Roel M.W.J. Beetsma
Henrik Jensen
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Recently, Svensson (1997) has shown that a combination of state-contingent inflation targeting and central banker "conservatism" produces optimal monetary policy if employment is persistent. We argue that the state-contingent nature of the scheme may undermine its credibility. We then show that the optimal policy in Svensson's model can nevertheless be attained through state-independent delegation.
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Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number
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