How Severe is the Time Inconsistency Problem in Monetary Policy? / Stefania Albanesi, V.V. Chari, Lawrence J. Christiano.

Format:

Book

Author/Creator:

Albanesi, Stefania.

Contributor:

National Bureau of Economic Research.

Chari, V.V.

Christiano, Lawrence J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8139.

NBER working paper series no. w8139

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

We analyze two monetary economies - a cash-credit good model and a limited participation model. In our models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. We define and analyze Markov equilibrium in these economies. We show that there is no time inconsistency problem for a wide range of parameter values.

Notes:

Print version record

February 2001.