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http://hdl.handle.net/10419/25513
  
Title:Robustly optimal monetary policy with near-rational expectations PDF Logo
Authors:Woodford, Michael
Issue Date:2005
Series/Report no.:CFS Working Paper 2007/12
Abstract:The paper considers optimal monetary stabilization policy in a forward-looking model, when the central bank recognizes that private-sector expectations need not be precisely modelconsistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs that are close enough to model-consistency. It is found that commitment continues to be important for optimal policy, that the optimal long-run inflation target is unaffected by the degree of potential distortion of beliefs, and that optimal policy is even more historydependent than if rational expectations are assumed.
Subjects:Optimal Monetary Policy
Commitment
History-Dependent Policy
JEL:E52
E58
E42
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-38229
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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