Search Results - subject:"Time Inconsistency"

Target Controllability and Time Consistency: Complement to the Tinbergen Rule

Yuan, Huiping; Miller, Stephen M. - Department of Economics, University of Connecticut - 2013

that time inconsistency does not exist in the case of an equal number of instruments and targets. Target uncontrollability … and time inconsistency, however, emerge as problems in the case of fewer instruments than targets. In this case, we obtain … target variability trade-off and solves time inconsistency. As a result, target values are controllable, establishing …

Persistent link: https://www.econbiz.de/10010888325

Sweet self-deception

Sommervoll, Dag - In: Journal of Economics 109 (2013) 1, pp. 73-88

People have a tendency to procrastinate when faced with aversive tasks—but they also procrastinate in relation to beneficial matters whose rewards are instantaneous. If agents value present anticipations of future consumption, revision of consumption plans may be viewed as a benign form of...

Persistent link: https://www.econbiz.de/10010987601

Why Do Politicians Implement Central Bank Independence Reforms?

Daunfeldt, Sven-Olov; Hellström, Jörgen; Landström, Mats - In: Atlantic Economic Journal 41 (2013) 4, pp. 427-438

The purpose of this paper is to investigate why politicians around the world have chosen to give up power to independent central banks, thereby reducing their ability to fine-tune the economy. A new data-set covering 132 countries, of which 86 countries had implemented such reforms, was...

Persistent link: https://www.econbiz.de/10010989092

Repeated moral hazard with a time-inconsistent agent

Yılmaz, Murat - In: Journal of Economic Behavior & Organization 95 (2013) C, pp. 70-89

used to capture time-inconsistency. I analyze the case where the agent is sophisticated in the sense that he is fully aware …

Persistent link: https://www.econbiz.de/10011048185

Distributional conflict in small open economies

Schäfer, Andreas; Steger, Thomas - In: Research in Economics 67 (2013) 4, pp. 355-367

capital. The overall distributional-conflict inefficiency is decomposed into three components: (i) a fundamental time … inconsistency problem; (ii) strategic interaction in the political process; (iii) heterogeneity among individuals and the resulting …

Persistent link: https://www.econbiz.de/10011065805

The intrinsic comparative dynamics of infinite horizon optimal control problems with a time-varying discount rate and time-distance discounting

Caputo, Michael R. - In: Journal of Economic Dynamics and Control 37 (2013) 4, pp. 810-820

The intrinsic comparative dynamics of a ubiquitous class of optimal control problems with a time-varying discount rate and time-distance discounting are derived and shown to be characterized by a positive semidefinite matrix. It is also shown that the said comparative dynamics are invariant to...

Persistent link: https://www.econbiz.de/10010617150

The gains from short-term commitments

Jensen, Christian - In: Journal of Macroeconomics 35 (2013) C, pp. 14-23

In a standard New-Keynesian sticky-price model, we study how the gains from commitment depend on how far ahead policymakers commit. While the traditional time-inconsistent solution assumes a once-and-for-all commitment to a plan for all future periods, we show that most of the gains can be...

Persistent link: https://www.econbiz.de/10010617303

The timing of pay

Parsons, Christopher A.; Wesep, Edward D. Van - In: Journal of Financial Economics 109 (2013) 2, pp. 373-397

There exists large and persistent variation in not only how, but when employees are paid, a fact unexplained by existing theory. This paper develops a simple model of optimal pay timing for firms. When workers have self-control problems, they under-save and experience volatile consumption...

Persistent link: https://www.econbiz.de/10010678705

Time inconsistency and the long-run effects of inflation

Boulware, Karl David; Reed, Robert R.; Ume, Ejindu - In: Economics Letters 120 (2013) 2, pp. 267-270

Recent work by Laibson (1997) identifies that individuals’ time discount factors evolve over time. This leads to a time-inconsistency … problem in which savings are distorted. This paper studies the long-run effects of inflation in the presence of a time-inconsistency …

Persistent link: https://www.econbiz.de/10010678805

Oil Price Dynamics and Monetary Policy in a Heterogeneous Monetary Union

Clausen, Volker; Wohltmann, Hans-Werner - In: Journal of Economics and Statistics (Jahrbuecher fuer … 233 (2013) 2, pp. 159-187

This paper analyzes the dynamic effects of oil price increases in a small two-country monetary union with asymmetric wage adjustment equations. Common oil price shocks lead during the adjustment process to temporary divergences in output and inflation and also to reversals in the relative...

Persistent link: https://www.econbiz.de/10010684140