Revisiting the role of multiplicative uncertainty in a model without inflationary bias
Kobayashi (2003) aims to show that, in a model without inflationary bias, an increase in the degree of multiplicative uncertainty on the transmission mechanism of monetary policy improves social welfare when central bankâ€™s preferences are highly uncertain. We demonstrate that this result applies only to the case in which society is strictly conservative, i.e., when the weight attached to output in the social welfare function is lower than one.
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- Kobayashi, Teruyoshi, 2003. "Multiplicative uncertainty in a model without inflationary bias," Economics Letters, Elsevier, vol. 80(3), pages 317-321, September.
- Muscatelli, Anton, 1998. "Optimal Inflation Contracts and Inflation Targets with Uncertain Central Bank Preferences: Accountability through Independence?," Economic Journal, Royal Economic Society, vol. 108(447), pages 529-542, March.
- Giuseppe Ciccarone & Enrico Marchetti & Giovanni Di Bartolomeo, 2007.
"Unions, Fiscal Policy And Central Bank Transparency,"
University of Manchester, vol. 75(5), pages 617-633, 09.
- Giuseppe Ciccarone & Giovanni Di Bartolomeo & Enrico Marchetti, 2005. "Unions, fiscal policy and central bank transparency," Macroeconomics 0508004, EconWPA.