Revisiting the role of multiplicative uncertainty in a model without inflationary bias

Kobayashi (2003) aims to show that, in a model without inflationary bias, an increase in the degree of multiplicative uncertainty on the transmission mechanism of monetary policy improves social welfare when central bankâ€™s preferences are highly uncertain. We demonstrate that this result applies only to the case in which society is strictly conservative, i.e., when the weight attached to output in the social welfare function is lower than one.

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Year of publication:	2008-02
Authors:	Ciccarone, Giuseppe ; Marchetti, Enrico
Institutions:	Dipartimento di Economia e Diritto, Facoltà di Economia
Subject:	Multiplicative uncertainty \| Brainard conservatism \| Uncertain preferences \| Monetary policy

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 110 1 pages long
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009649930