• 1 Introduction
  • 2 Information Sets and the Private Sector
  • 3 Optimal Policy under Commitment
  • 4 Optimal Policy under Discretion
  • 5 Illustration with a New Keynesian Model
  • 5.1 New Keynesian Economy
  • 5.2 Signal Extraction for Given Policy
  • 5.3 Optimal Policy Outcomes
  • 6 Related Literature
  • 7 Conclusions
  • Appendix
  • A Kalman Filter
  • B The Saddlepoint Problem under Commitment
  • C Commitment under Symmetric Information
  • D Regulator for Discretion Problem
  • E Policy Improvement Algorithm
  • References