The conservative central banker revisited: Too conservative is more costly than too liberal

A conservative central banker, who puts more weight on inflation stabilization than the social planner, solves the stabilization bias of discretionary monetary policy. This note shows that the welfare costs of deviating from the optimal degree of monetary conservatism are asymmetric. A too conservative central banker is more costly than a too liberal central banker.

MoreLess

Year of publication:	2008
Authors:	Tillmann, Peter
Published in:	European Journal of Political Economy. - Elsevier, ISSN 0176-2680. - Vol. 24.2008, 4, p. 737-741
Publisher:	Elsevier
Keywords:	Optimal monetary policy Delegation Conservative central bank Stabilization bias

More details

Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005331834