Orphanides, Athanasios (contributor); … - 2002 - [Elektronische Ressource]
time
t + 1 innovations are observed. We assume that the central bank has perfect knowledge
regarding the structural … irreducible variance of inflation, owing to unpredictable output and
inflation innovations, equals
2
e
+
2
2
u
. More … the optimal policy. Note that owing to the linear-quadratic structure of the model, the
distributions of the innovations …