Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39532
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dc.contributor.authorWieland, Volkeren_US
dc.date.accessioned2010-09-01T09:47:24Z-
dc.date.available2010-09-01T09:47:24Z-
dc.date.issued1999en_US
dc.identifier.urihttp://hdl.handle.net/10419/39532-
dc.description.abstractSince central banks have limited information concerning the transmission channel ofmonetary policy, they are faced with the difficult task of simultaneously controlling the policytarget and estimating the impact of policy actions. A tradeoff between estimation and controlarises because policy actions influence estimation and provide information which may improvefuture performance. I analyze this tradeoff in a simple model with parameter uncertainty andconduct dynamic simulations of the policymaker's decision problem in the presence of the typeof uncertainties that arose in the wake of German reunification. A policy that separates learningfrom control may induce a persistent upward bias in money growth and inflation, just as observedafter unification. In contrast, the optimal learning strategy which exploits the tradeoff betweencontrol and estimation significantly improves stabilization performance and reduces the likelihoodof inflationary bias.-
dc.language.isogeren_US
dc.publisher|aZEI |cBonnen_US
dc.relation.ispartofseries|aZEI working paper |xB 09-1999en_US
dc.subject.jelE52-
dc.subject.jelE40-
dc.subject.jelD83-
dc.subject.jelC44-
dc.subject.ddc330en_US
dc.subject.keywordoptimal control with unknown parameters-
dc.subject.keywordBayesian learning-
dc.subject.keywordmonetary policy-
dc.subject.keywordstructural change-
dc.subject.keywordlearning by doing-
dc.subject.keywordinflation targeting-
dc.titleMonetary policy, parameter uncertainty and optimal learningen_US
dc.type|aWorking Paperen_US
dc.identifier.ppn815776853en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zeiwps:B091999-

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