Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/101487 
Year of Publication: 
1995
Series/Report no.: 
Diskussionsbeiträge - Serie II No. 251
Publisher: 
Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft, Konstanz
Abstract: 
The effects of different institutional arrangements for the central bank are examined in the presence of economic shocks and uncertainty about the central banker's and the medianvoter's inflation target. A contract which is based on self-imposed monetary target announcements proves to be superior to the best monetary rule if conflicts about the inflation target within society are relatively small compared to the initial uncertainty about the medianvoter's objective. It is superior to the laissez faire solution if unemployment exceeds a certain threshold level. The optimal choice of costs of deviations from auto-imposed targets depends on the type of conflict within society, whether the individuals disagree on the weight of the inflation versus the employment target or on the value of the inflation target itself.
Subjects: 
signaling
monetary target announcements
monetary rules
JEL: 
E50
E52
E58
Document Type: 
Working Paper

Files in This Item:
File
Size
642.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.