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Unconditionally optimal monetary policy

  • Damjanovic, Tatiana
  • Damjanovic, Vladislav
  • Nolan, Charles

We develop a simple and intuitive approach for analytically deriving unconditionally optimal (UO) policies, a topic of enduring interest in optimal monetary policy analysis. The approach can be employed in both general linear-quadratic problems and in the underlying non-linear environments. A detailed example is provided using a canonical New Keynesian framework.

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File URL: http://www.sciencedirect.com/science/article/B6VBW-4RMFP3P-2/1/055de66c2965a800535212a21765f3d6
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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 55 (2008)
Issue (Month): 3 (April)
Pages: 491-500

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Handle: RePEc:eee:moneco:v:55:y:2008:i:3:p:491-500
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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  1. Christian Jensen & Bennett T. Mccallum, 2010. "Optimal Continuation versus the Timeless Perspective in Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(6), pages 1093-1107, 09.
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  13. Erceg, Christopher J. & Henderson, Dale W. & Levin, Andrew T., 2000. "Optimal monetary policy with staggered wage and price contracts," Journal of Monetary Economics, Elsevier, vol. 46(2), pages 281-313, October.
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