Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62030
Authors: 
Winkler, Roland
Wohltmann, Hans-Werner
Year of Publication: 
2012
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2012: Neue Wege und Herausforderungen für den Arbeitsmarkt des 21. Jahrhunderts - Session: Information and the Macroeconomy C18-V3
Abstract: 
This paper investigates optimal policy in the presence of anticipated (or news) shocks. We determine the optimal unrestricted and restricted policy response in a general rational expectations model and show that, if shocks are news shocks, the optimal unrestricted control rule under commitment contains a forward-looking element. As an example, we lay out a micro-founded hybrid New Keynesian model and show i) that anticipated cost-push shocks entail higher welfare losses than unanticipated shocks of equal size and ii) that the inclusion of forward-looking elements enhances distinctly the performance of simple optimized interest rate rules.
JEL: 
E52
E32
C61
Document Type: 
Conference Paper

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