Chen, Xiaoshan; Kirsanova, Tatiana; Leith, Campbell - Department of Economics, Adam Smith Business School - 2014
, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals … appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although … welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on …