Search Results - subject:"time inconsistency."

Saving Rate Dynamics in the Neoclassical Growth Model - Hyperbolic Discounting and Observational Equivalence

Farzin, Yeganeh Hossein; Wendner, Ronald - 2013

The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition path of a country’s saving rate exhibits a rising or non-monotonic pattern. In important...

Persistent link: https://www.econbiz.de/10014157373

The Optimal Degree of Discretion in Monetary Policy

Athey, Susan; Atkeson, Andrew; Kehoe, Patrick J. - 2013

specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap … monetary authority discretion to react to its private information against society's need to guard against the time … inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic …

Persistent link: https://www.econbiz.de/10014029267

Discounting Under Disagreement

Heal, Geoffrey - 2013

A group of agents disagree about the appropriate inter temporal preferences to use when exploiting a common productive resource. They thus delegate decision making to a social planner who allocates consumption efficiently across heterogeneous individuals and over time. We define `policy...

Persistent link: https://www.econbiz.de/10013082765

Saving Rate Dynamics in the Neoclassical Growth Model – Hyperbolic Discounting and Observational Equivalence

Farzin, Yeganeh Hossein - 2013

The standard neoclassical growth model with Cobb-Douglas production predicts a monotonically declining saving rate, when reasonably calibrated. Ample empirical evidence, however, shows that the transition path of a country's saving rate exhibits a rising or non-monotonic pattern. In important...

Persistent link: https://www.econbiz.de/10013084502

Working Over Time : Dynamic Inconsistency in Real Effort Tasks

Augenblick, Ned - 2013

rewards. Several recent studies have failed to find the standard patterns of time inconsistency. However, such monetary … confirm very limited time inconsistency in monetary choices. However, subjects show considerably more present bias in effort …

Persistent link: https://www.econbiz.de/10013087790

Macroprudential Regulation Versus Mopping Up after the Crash

Jeanne, Olivier - 2013

We study the interplay of optimal ex-ante (macroprudential) and ex-post (monetary or fiscal stimulus) measures to respond to systemic financial crises in a tractable model of fire sales. We find that it is generally optimal to use both, rejecting the Greenspan doctrine to only intervene ex post....

Persistent link: https://www.econbiz.de/10013089016

Debt and Deficit Fluctuations in a Time-Consistent Setup

Grechyna, Daryna - 2013

This paper compares the stochastic behavior of fiscal variables under optimal fiscal policy for the cases of full commitment (Ramsey problem) and partial commitment by the government (focusing on differentiable Markov perfect equilibrium). It shows that, around the steady state, the properties...

Persistent link: https://www.econbiz.de/10013091694

Optimal Time-Consistent Macroprudential Policy

Bianchi, Javier - 2013

Collateral constraints widely used in models of financial crises feature a pecuniary externality: Agents do not internalize how borrowing decisions taken in “good times” affect collateral prices during a crisis. We show that agents in a competitive equilibrium borrow more than a financial...

Persistent link: https://www.econbiz.de/10013071902

Time-Consistent Investment Under Model Uncertainty : The Robust Forward Criteria

Källblad, Sigrid - 2013

We combine forward investment performance processes and ambiguity averse portfolio selection. We introduce the notion of robust forward criteria which addresses the issues of ambiguity in model specification and in preferences and investment horizon specification. It describes the evolution of...

Persistent link: https://www.econbiz.de/10013072977

Dealing with a liquidity trap when government debt matters optimal time-consistent monetary and fiscal policy

Burgert, Matthias; Schmidt, Sebastian - 2013

Persistent link: https://www.econbiz.de/10010233241