Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73412
Authors: 
Pinkwart, Nicolas
Year of Publication: 
2010
Series/Report no.: 
BGPE Discussion Paper 91
Abstract: 
This paper offers several contributions to actual research and discussion on monetary policy. It clarifies the relationship between uncertainty of inflation persistence and optimal monetary policy and discusses the consequences of the recent Blanchard proposal to implement a higher inflation target in the light of parameter uncertainty. Furthermore, it provides insights of general interest on the methodological level by analyzing the interrelations between normalization of variables and their independence properties and by extending standard solution methods of dynamic programming problems to non-orthogonal parameter uncertainty.
Subjects: 
Inflation Persistence
Parameter Uncertainty
Inflation Target
Dynamic Programming
JEL: 
E52
E58
C61
Document Type: 
Working Paper

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