In noise we trust? : Optimal monetary policy with random targets

Ethan Cohen-Cole and Bogdan Cosmaciuc

We show that a monetary policy in which the central bank commits to a randomized inflation target allows for potentially faster-expectations convergence than with a fixed target. The randomized target achieves faster convergence in particular in transition environments: those demonstrating either particularly high or low inflation. -- Monetary policy; asymmetric information; Bayesian rational expectations; commitment

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Year of publication:	Oct. 2006
Other Persons:	Cohen-Cole, Ethan (contributor) ; Cosmaciuc, Bogdan (contributor)
Publisher:	Boston, Mass. : Federal Reserve Bank of Boston
Subject:	Geldpolitik \| Monetary policy \| Theorie \| Theory \| Vertrauen \| Confidence \| Inflationssteuerung \| Inflation targeting \| Glaubwürdigkeit \| Credibility

Extent:	Online-Ressource, 42 S., Text graph. Darst.
Series:	Working papers / Federal Reserve Bank of Boston. - Boston, Mass. : [Verlag nicht ermittelbar], ZDB-ID 2180749-8. - Vol. 06,14
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat reader
Other identifiers:	hdl:10419/55578 [Handle]
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination ; E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10003715536