Probing Potential Output: Monetary Policy, Credibility And Optimal Learning Under Uncertainty

This file is part of IDEAS, which uses RePEc data

Probing Potential Output: Monetary Policy, Credibility And Optimal Learning Under Uncertainty

Author Info

James Yetman (Bank of Canada)

Additional information is available for the following registered author(s):

James Yetman

Abstract

The effective conduct of monetary policy is hampered by uncertainty surrounding the level of potential output. Here, the case for following a more aggressive policy to learn about the economy is considered in a model where potential output is changing over time. Following such a policy may be referred to as probing or experimenting.In this model, with parameters calibrated to recent Canadian data, the optimal amount of probing is small and increases only a little with credibility. Only for unrealistically large amounts of uncertainty does the optimal policy with probing diverge significantly from a policy that ignores learning, and even then, for most forms of uncertainty, the optimal amount of probing diminishes as credibility rises.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2000 with number 181.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 05 Jul 2000
Date of revision:
Handle: RePEc:sce:scecf0:181

Contact details of provider:
Postal: CEF 2000, Departament d'Economia i Empresa, Universitat Pompeu Fabra, Ramon Trias Fargas, 25,27, 08005, Barcelona, Spain
Fax: +34 93 542 17 46
Email:
Web page: http://enginy.upf.es/SCE/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

Article
- Yetman, James, 2003. "Probing potential output: Monetary policy, credibility, and optimal learning under uncertainty," Journal of Macroeconomics, Elsevier, vol. 25(3), pages 311-330, September. [Downloadable!] (restricted)
Paper
- Yetman, James, 2000. "Probing Potential Output: Monetary Policy, Credibility, and Optimal Learning under Uncertainty," Working Papers 00-10, Bank of Canada. [Downloadable!]

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.)

repec:bep:macadv:v:6:y:2006:i:1:p:1288-1288 is not listed on IDEAS
Doyle, Matthew, 2006. "On the Optimality of Delay in 'Monetary Policy as a Process of Search'," Staff General Research Papers 12503, Iowa State University, Department of Economics. [Downloadable!]
Eijffinger, Sylvester C W & Schaling, Eric & Tesfaselassie, Mewael F., 2006. "Learning About the Term Structure and Optimal Rules for Inflation Targeting," CEPR Discussion Papers 5896, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Tesfaselassie, Mewael F. & Schaling, Eric & Eijffinger, Sylvester, 2006. "Learning about the term structure and optimal rules for inflation targeting," Discussion Paper 88, Tilburg University, Center for Economic Research. [Downloadable!]
- Tesfaselassie, M.F. & Schaling, E. & Eijffinger, S.C.W., 2006. "Learning About the Term Structure and Optimal Rules for Inflation Targeting," Research Paper ERS-2006-058-F&A Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
Jean-Philippe Cayen & Simon van Norden, 2002. "La fiabilité des estimations de l'écart de production au Canada," Working Papers 02-10, Bank of Canada. [Downloadable!]

Statistics

Access and download statistics

Did you know? About 2700 working paper series are listed on RePEc.

This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.