Optimal Inflation Targets, Conservative Central Banks, and Linear Inflation Contracts: Comment.

Recently, Svensson (1997) has shown that a combination of state-contingent inflation targeting and central banker conservatism produces optimal monetary policy if employment is persistent. We argue that the state-contingent nature of the scheme may undermine its credibility. We then show that the optimal policy in Svensson's model can nevertheless be attained through state-independent delegation.

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Year of publication:	1998
Authors:	Beetsma, Roel M.W.J. ; Jensen, Henrik
Publisher:	Copenhagen : University of Copenhagen, Economic Policy Research Unit (EPRU)

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Series:	EPRU Working Paper Series ; 1998-11
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	868856126 [GVK] hdl:10419/82002 [Handle] RePEc:kud:epruwp:98-11 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10010320873

Optimal Inflation Targets, Conservative Central Banks, and Linear Inflation Contracts: Comment.

Optimal Inflation Targets, Conservative Central Banks, and Linear Inflation Contracts: Comment.