Uncertainty and monetary policy
AbstractThe experience of monetary policy making in an uncertain environment has encouraged increased attention to the concept of model uncertainty, that is, uncertainty as to which is the best model. A particular difficulty has been the need to operationalise the concept in order to yield definitive policy recommendations; pluralism of method and the importance of judgement offer a potential solution. The literature building on Keynes’s theory of probability, in the meantime, has been refining the concept of uncertainty as something other than complete ignorance, although still falling short of quantifiability. This line of reasoning too supports pluralism of method and the importance of judgement. The purpose of this paper is to consider these different approaches taken to uncertainty for possibilities of synergy. Crucial issues are whether or not the goal is still to identify one best model, and how far model uncertainty is to be applied to individual decision-making.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by SCEME in its series SCEME Working Papers: Advances in Economic Methodology with number 002/2003.
Length: 36 pages
Date of creation: Jan 2003
Date of revision:
model-uncertainty; pluralism; Keynes;
Other versions of this item:
- B4 - Schools of Economic Thought and Methodology - - Economic Methodology
- B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Giuseppe Fontana & Bill Gerrard, 2006.
"The future of Post Keynesian economics,"
Banca Nazionale del Lavoro Quarterly Review,
Banca Nazionale del Lavoro, vol. 59(236), pages 49-80.
- Tomáš Otáhal, 2012. "Economic History: What Are the Contributions of Historical Example to Understanding of Economic Phenomena?," Politická ekonomie, University of Economics, Prague, vol. 2012(5), pages 679-693.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthias Klaes) The email address of this maintainer does not seem to be valid anymore. Please ask Matthias Klaes to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.