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Discreet Commitments and Discretion of Policymakers with Private Information

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  • Elmar Mertens

    (Federal Reserve Board)

Abstract

Illustrated in a New Keynesian economy with time-varying output targets of the policymaker, belief management improves outcomes compared to symmetric information. At the margin, the policymaker tries to be intransparent about policy objectives by engineering disturbances which lower public beliefs about the persistence of output targets.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 763.

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Date of creation: 2010
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Handle: RePEc:red:sed010:763

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Cited by:
  1. Timothy Cogley & Christian Matthes & Argia M. Sbordone, 2011. "Optimal disinflation under learning," Staff Reports 524, Federal Reserve Bank of New York.
  2. Cogley, Timothy & Matthes, Christian & Sbordone, Argia M., 2014. "Optimized Taylor Rules for Disinflation When Agents are Learning," Working Paper 14-7, Federal Reserve Bank of Richmond.

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