Title of article
Robustlyoptimalmonetarypolicyinamicrofounded NewKeynesianmodel
Author/Authors
Klaus Adam، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2012
Pages
20
From page
468
To page
487
Abstract
We consideroptimalmonetarystabilizationpolicyinaNewKeynesianmodelwith
explicitmicrofoundations,whenthecentralbankrecognizesthatprivate-sector
expectationsneednotbepreciselymodel-consistent,andwishestochooseapolicy
thatwillbeasgoodaspossibleinthecaseofanybeliefscloseenoughtomodel-
consistency.Weshowhowtocharacterizerobustlyoptimalpolicywithoutrestricting
considerationaprioritoaparticularparametricfamilyofcandidatepolicyrules.We
show thatrobustlyoptimalpolicycanbeimplementedthroughcommitmenttoatarget
criterioninvolvingonlythepathsofinflationandasuitablydefinedoutputgap,butthat
a concernforrobustnessrequiresgreaterresistancetosurpriseincreasesininflation
thanwouldbeconsideredoptimalifonecouldcountontheprivatesectortohave
‘‘rationalexpectations.’’
Keywords
Robust controlNear-rational expectationsBelief distortionsTarget criterion
Journal title
Journal of Monetary Economics
Serial Year
2012
Journal title
Journal of Monetary Economics
Record number
846535
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