IDEAS home Printed from
   My bibliography  Save this paper

Reputational Constraints On Monetary Policy


  • Rogoff, Kenneth


Recent advances in game theory have made it possible to study monetary policy credibility in a more structured fashion. Some have used these new models to argue that there is less need to place legal restraints on monetary policy than was previously believed; reputational considerations discourage the monetary authorities from attempting surprise inflations. In this study, I critically assess a number of alternative models of monetary policy reputation, including some variants which have not been examined previously. The bulk of the paper is concerned with comparing specific details of these models. One general conclusion is that although the first generation of models of monetary policy reputation yield a significant number of important insights, it is premature to argue that time consistency is not a major issue in the design of monetary policy institutions. The main problem is that the models either yield a multiplicity of equilibria, or/and yield conclusions which are very sensitive to apparently minor changes in the information structure. Whereas an optimal reputational equilibrium can be achieved without any explicit cooperation among atomistic private agents, it is not (yet) clear how they coordinate on expectations strategies.

Suggested Citation

  • Rogoff, Kenneth, 1986. "Reputational Constraints On Monetary Policy," SSRI Workshop Series 292683, University of Wisconsin-Madison, Social Systems Research Institute.
  • Handle: RePEc:ags:uwssri:292683
    DOI: 10.22004/ag.econ.292683

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item


    Research Methods/ Statistical Methods;


    Access and download statistics


    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:ags:uwssri:292683. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.