MARC Record from Library of Congress

LEADER: 02295cam a22003017a 4500
001 2004616743
003 DLC
005 20130531100828.0
007 cr |||||||||||
008 041116s2004 mnu sb f000 0 eng
010 $a 2004616743
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aAthey, Susan.
245 14 $aThe optimal degree of discretion in monetary policy$h[electronic resource] /$cSusan Athey, Andrew Atkeson, and Patrick J. Kehoe.
260 $a[Minneapolis, Minn.] :$bFederal Reserve Bank of Minneapolis,$c[2004]
490 1 $aFederal Reserve Bank of Minneapolis, Research Department staff report ;$v326
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 11/16/2004.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society's desire to give the monetary authority discretion to react to its private information against society's need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem and the less important is private information, the smaller is the optimal degree of discretion. As either the time inconsistency problem becomes sufficiently severe or private information becomes sufficiently unimportant, the optimal degree of discretion is none"--Federal Reserve Bank of Minneapolis web site.
650 0 $aMonetary policy.
700 1 $aAtkeson, Andrew.
700 1 $aKehoe, Patrick J.
830 0 $aStaff report (Federal Reserve Bank of Minneapolis. Research Department : Online) ;$v326.
856 40 $uhttp://woodrow.mpls.frb.fed.us/research/sr/sr326.html