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Performance of monetary policy with internal central bank forecasting

Listed author(s):
  • Honkapohja, Seppo
  • Mitra, Kaushik

Recent models of monetary policy have analysed the desirability of different optimal and ad hoc interest-rate rules under the restrictive assumption that forecasts of the private sector and central bank are homogeneous.In this paper, we study from a learning perspective the implications of heterogeneity across forecasts by the central bank and private agents for the performance of interest-rate rules.Key words: adaptive learning, stability, heterogeneity, monetary policy JEL classification numbers: E52, E31, D84

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File URL: https://helda.helsinki.fi/bof/bitstream/123456789/7767/1/103005.pdf
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Paper provided by Bank of Finland in its series Research Discussion Papers with number 3/2002.

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Date of creation: 2002
Handle: RePEc:bof:bofrdp:2002_003
Contact details of provider: Postal:
Bank of Finland, P.O. Box 160, FI-00101 Helsinki, Finland

Web page: http://www.suomenpankki.fi/en/

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  24. Honkapohja, Seppo & Mitra, Kaushik, 2004. "Are non-fundamental equilibria learnable in models of monetary policy?," Journal of Monetary Economics, Elsevier, vol. 51(8), pages 1743-1770, November.
  25. Mitra, Kaushik, 2003. " Desirability of Nominal GDP Targeting under Adaptive Learning," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(2), pages 197-220, April.
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