IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v33y1992i3p619-28.html
   My bibliography  Save this article

A Theory of Fed Watching in a Macroeconomic Policy Game

Author

Listed:
  • Balke, Nathan S
  • Haslag, Joseph H

Abstract

This paper examines the phenomenon of "Fed watching" within the context of a macroeconomic policy game. Following A. Cukierman and A. H. Meltzer's 1986 article, the policymaker's preferences are private information and noisy monetary control causes past observations of money growth to be a noisy signal of the monetary authority's future intentions. Individuals are allowed to acquire additional information about the monetary authority's preferences. Thus, both past observations of money growth and costly information about the policymaker's preferences are used by agents in forming expectations about policy. The public's acquisition of information alters the monetary authority's strategic calculus, making noisy monetary control less desirable. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Balke, Nathan S & Haslag, Joseph H, 1992. "A Theory of Fed Watching in a Macroeconomic Policy Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 619-628, August.
    • Handle: RePEc:ier:iecrev:v:33:y:1992:i:3:p:619-28
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0020-6598%28199208%2933%3A3%3C619%3AATOFWI%3E2.0.CO%3B2-O&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joseph H. Haslag, 2000. "On Fed watching and central bank transparency in an overlapping generations model," Working Papers 0002, Federal Reserve Bank of Dallas.
    2. Celso Brunetti, Bahattin Buyuksahin, Michel A. Robe, and Kirsten R. Soneson, 2013. "OPEC "Fair Price" Pronouncements and the Market Price of Crude Oil," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    3. Mark P. Taylor & Lucio Sarno, 2001. "Official Intervention in the Foreign Exchange Market: Is It Effective and, If So, How Does It Work?," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 839-868, September.
    4. Hughes Hallett, Andrew & Demertzis, Maria, 2003. "Three Models of Imperfect Transparency in Monetary Policy," CEPR Discussion Papers 4117, C.E.P.R. Discussion Papers.
    5. Andrew Hughes Hallett & Nicola Viegi, 2003. "Imperfect transparency and the strategic use of information: an ever present temptation for central bankers?," Manchester School, University of Manchester, vol. 71(5), pages 498-520, September.
    6. Gai, Prasanna & Lou, Edmund & Wu, Sherry X., 2020. "Targeted disclosure and monetary policy flexibility: A simple model," Economics Letters, Elsevier, vol. 194(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:33:y:1992:i:3:p:619-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.