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Discreet Commitments and Discretion of Policymakers with Private Information

  • Elmar Mertens

    (Federal Reserve Board)

Illustrated in a New Keynesian economy with time-varying output targets of the policymaker, belief management improves outcomes compared to symmetric information. At the margin, the policymaker tries to be intransparent about policy objectives by engineering disturbances which lower public beliefs about the persistence of output targets.

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File URL: https://www.economicdynamics.org/meetpapers/2010/paper_763.pdf
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Paper provided by Society for Economic Dynamics in its series 2010 Meeting Papers with number 763.

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Date of creation: 2010
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Handle: RePEc:red:sed010:763
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