Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83934
Authors: 
Páez-Farrell, Juan
Year of Publication: 
2007
Series/Report no.: 
Cardiff Economics Working Papers E2007/17
Abstract: 
Recent research has suggested that in deriving optimal policy under discretion, policymakers should react as if there were no structural inflation persistence in order to improve welfare. This paper considers whether such a strong result extends to an inflation targeting central bank with a more general Phillips curve formulation. The findings indicate that if anything, a central banker that assumes a high degree of inflation inertia is often preferable.
Subjects: 
optimal monetary policy
discretion
uncertainty
inflation persistence
JEL: 
E31
E52
E61
E63
Document Type: 
Working Paper

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