Discretion vs. timeless perspective under model-consistent stabilization objectives

I. Petrella, R. Rossi, E. Santoro

Research output: Contribution to journalArticlepeer-review

Abstract

Recent literature has reported situations in which discretion dominates timeless perspective in the presence of elements that reduce the slope of the New Keynesian Phillips curve. Considering a model-consistent welfare metric inhibits this mechanism in the standard New Keynesian framework.
Original languageEnglish
JournalEconomics Letters
DOIs
Publication statusPublished - 1 Jan 2014

Keywords

  • Discretion; Loss of social welfare; Monetary policy; Timeless perspective

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