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Beetsma, Roel M.W.J.
Jensen, Henrik
Year of Publication: 
Series/Report no.: 
EPRU Working Paper Series 1998-11
Recently, Svensson (1997) has shown that a combination of state-contingent inflation targeting and central banker conservatism produces optimal monetary policy if employment is persistent. We argue that the state-contingent nature of the scheme may undermine its credibility. We then show that the optimal policy in Svensson's model can nevertheless be attained through state-independent delegation.
Document Type: 
Working Paper

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