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Central bank transparency about model uncertainty and wage setters

Author

Listed:
  • Li Qin

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Eleftherios Spyromitros

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper addresses the issue of monetary policy transparency in a context of model uncertainty by adapting the robust control approach. We find that even if the desire of robustness induces an aggressive response of union and central bank, the central bank should reveal its preference about model robustness.

Suggested Citation

  • Li Qin & Eleftherios Spyromitros, 2008. "Central bank transparency about model uncertainty and wage setters," Post-Print hal-00279193, HAL.
    • Handle: RePEc:hal:journl:hal-00279193
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    References listed on IDEAS

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    1. Giordani, Paolo & Soderlind, Paul, 2004. "Solution of macromodels with Hansen-Sargent robust policies: some extensions," Journal of Economic Dynamics and Control, Elsevier, vol. 28(12), pages 2367-2397, December.
    2. Gruner, Hans Peter, 2002. "How much should central banks talk?: A new argument," Economics Letters, Elsevier, vol. 77(2), pages 195-198, October.
    3. Walsh, Carl E, 2004. "Robustly Optimal Instrument Rules and Robust Control: An Equivalence Result," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(6), pages 1105-1113, December.
    4. Grüner, Hans Peter, 2002. "How Much Should Central Banks Talk? A New Argument," CEPR Discussion Papers 3194, C.E.P.R. Discussion Papers.
    5. Alexei Onatski & Noah Williams, 2003. "Modeling Model Uncertainty," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1087-1122, September.
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    More about this item

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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