Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152446
Authors: 
Svensson, Lars E. O.
Woodford, Michael
Year of Publication: 
2000
Series/Report no.: 
ECB Working Paper 12
Abstract: 
The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined. The optimal response to the optimal estimate of potential output displays certainty-equivalence, whereas the optimal response to the imperfect observation of output depends on the noise in this observation.
JEL: 
E37
E47
E52
E58
Document Type: 
Working Paper

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