Journal article
Authors list: Tillmann, P
Publication year: 2009
Pages: 730-734
Journal: Journal of Macroeconomics
Volume number: 31
Issue number: 4
DOI Link: https://doi.org/10.1016/j.jmacro.2008.09.008
Publisher: Elsevier
Discretionary monetary policy suffers from a stabilization bias, whose size is known to be dependent on the degree of shock persistence. This note analyzes the size of this bias and, consequently, the rationale for delegating monetary policy to an inflation-averse central banker, when the economy faces uncertainty about the true degree of shock persistence. We show that the stabilization bias increases if uncertainty becomes larger. Hence, the degree of optimal monetary conservatism increases with the degree of uncertainty.
Abstract:
Citation Styles
Harvard Citation style: Tillmann, P. (2009) The stabilization bias and robust monetary policy delegation, Journal of Macroeconomics, 31(4), pp. 730-734. https://doi.org/10.1016/j.jmacro.2008.09.008
APA Citation style: Tillmann, P. (2009). The stabilization bias and robust monetary policy delegation. Journal of Macroeconomics. 31(4), 730-734. https://doi.org/10.1016/j.jmacro.2008.09.008