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State-Contingent Inflation Contracts and Output Persistence


  • Lockwood, B.


This note shows that the government can achieve its precommitment outcome in monetary policy when output follows an autoregressive process, by offering the central banker a linear contract, and where the parameters of the contract depend on lagged output. This note therefore offers an extension of recent results of Walsh to the case of persistence in real economic variables such as output or unemployment.

Suggested Citation

  • Lockwood, B., 1995. "State-Contingent Inflation Contracts and Output Persistence," Discussion Papers 9513, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:9513

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    References listed on IDEAS

    1. B. E. Bravo-Ureta & L. Rieger, 1990. "Alternative Production Frontier Methodologies And Dairy Farm Efficiency," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(2), pages 215-226.
    2. Trosper, Ronald L, 1978. "American Indian Relative Ranching Efficiency," American Economic Review, American Economic Association, vol. 68(4), pages 503-516, September.
    3. repec:exe:wpaper:99/14 is not listed on IDEAS
    4. Dawson, P J, 1987. "Farm-Specific Technical Efficiency in the England and Wales Dairy Sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 14(4), pages 383-394.
    5. Faqir Singh Bagi & Cliff J. Huang, 1983. "Estimating Production Technical Efficiency for Individual Farms in Tennessee," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 31(2), pages 249-256, July.
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    7. Hadri, K. & Guermat, C. & Whittaker, J., 1998. "Doubly Heteroscedastic Stochastic Production Frontiers with an English Cere al Farms," Discussion Papers 9908, Exeter University, Department of Economics.
    8. Byrnes, Patricia, et al, 1987. "Technical Efficiency and Size: The Case of Illinois Grain Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 14(4), pages 367-381.
    9. Bagi, Faqir Singh, 1982. "Relationship Between Farm Size And Technical Efficiency In West Tennessee Agriculture," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 14(02), December.
    10. Bagi, Faqir Singh, 1982. "Relationship Between Farm Size and Technical Efficiency in West Tennessee Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 14(02), pages 139-144, December.
    11. Guermat, C. & Hadri, K., 1999. "Heteroscedasticity in Stochastic Frontier Models: a Monte Carlo Analysis," Discussion Papers 9914, Exeter University, Department of Economics.
    12. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
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    14. Kumbhakar, Subal C, 1993. "Short-Run Returns to Scale, Farm-Size, and Economic Efficiency," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 336-341, May.
    15. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
    16. Guermat, C. & Hadri, K., 1999. "Backpropagation Neural Network versus Translog Model in Stochastic Frontiers: a Note Carlo Compatrison," Discussion Papers 9916, Exeter University, Department of Economics.
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy


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