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Announcements and Credibility of Monetary Policy


  • Schultz, Christian


An infinitely repeated monetary policy game a la R. Barro and D. Gordon (1983) is considered. Before the game starts the government announces a policy rule. If there is a slight probability that government is honest and a slight probability that the government makes mistakes, then a sufficiently patient government will have average loss close to its commitment loss in all sequentially rational equilibria of the infinitely repeated game. Copyright 1996 by Royal Economic Society.

Suggested Citation

  • Schultz, Christian, 1996. "Announcements and Credibility of Monetary Policy," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 673-680, October.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:4:p:673-80

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    References listed on IDEAS

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    Cited by:

    1. Cem Mehmet Baydur & Bora Suslu & Selahattin Bekmez, 2004. "The independence of central bank in view of Rogoff: The Turkish experience," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 143-143.
    2. R. Cellini & L. Lambertini, 2003. "On the Dynamic Consistency of Optimal Monetary Policy," Working Papers 463, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior


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