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On determinacy and learnability in a New Keynesian model with unemployment
Tesfaselassie, Mewael F.; Schaling, Eric - 2009
and Galí (2006, 2008) New-Keynesian model of inflation and unemployment, where labor market frictions due to costs of … policy rules based on current period inflation and unemployment our results are similar to those of Bullard and Mitra (2002 … market institutions we find that responding too much to expected inflation and too little to expected unemployment may very …
Persistent link: https://www.econbiz.de/10003827166
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Learning, Inflation Reduction and Optimal Monetary Policy
Schaling, Eric - 2005
sense that it understands and observes the process by which private sector inflation expectations are generated, and one in … which the central bank has to learn the private sector inflation forecasting rule. Here, the learning scheme we investigate … accommodates private sector inflation expectations) is no longer constant across the disinflation, but becomes state …
Persistent link: https://www.econbiz.de/10014071240
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Convergence of Learning Algorithms Without a Projection Facility
Honkapohja, Seppo; Evans, George W. - 1998
Drawing upon recent contributions in the statistical literature, we present a new result on the convergence of recursive, stochastic algorithms which can be applied to economic models with learning. The formal result provides probability bounds for convergence which can be used to describe the...
Persistent link: https://www.econbiz.de/10014079480
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Convergence of learning algorithms without a projection facility
Honkapohja, Seppo - 1996
Persistent link: https://www.econbiz.de/10013408084
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Complementarity, Growth, and Trade
Honkapohja, Seppo; Turunen-Red, Arja H. - 2004
We consider an endogenous growth model with international trade in complementary capital goods. The model possesses several distinct, balanced growth solutions, which we classify using stability under adaptive learning. Some of the equilibria can involve growth rates much higher than others. We...
Persistent link: https://www.econbiz.de/10014113700
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On determinacy and learnability in a New Keynesian model with unemployment
Tesfaselassie, Mewael F.; Schaling, Eric - 2009
and Galí (2006, 2008) New-Keynesian model of inflation and unemployment, where labor market frictions due to costs of … policy rules based on current period inflation and unemployment our results are similar to those of Bullard and Mitra (2002 … market institutions we find that responding too much to expected inflation and too little to expected unemployment may very …
Persistent link: https://www.econbiz.de/10010265227
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Incentive Schemes for Central Bankers Under Uncertainty : Inflation Targets Versus Contracts
Schaling, Eric; Hoeberichts, Marco; Eijffinger, … - 2011
performs better than an explicit inflation target as proposed by Svensson. The reason is that an inflation target produces a … higher variance of inflation. It is also shown that it is optimal to offer a linear inflation contract that does not depend …
Persistent link: https://www.econbiz.de/10014206428
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Incentive Contracts for Central Bankers Under Uncertainty : Walsh-Svensson Non-Equivalence Revisited
Schaling, Eric; Hoeberichts, Marco; Eijffinger, … - 2011
(1995) performs better in terms of social welfare than an explicit inflation target as proposed by Svensson (1997). The … variance of inflation will be considerably higher with an inflation target. We also find that on top of an optimal linear … outcome. In the case of an inflation target, a more conservative banker is needed than with a Walsh contract …
Persistent link: https://www.econbiz.de/10014209032
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Price Level Targeting with Evolving Credibility
Honkapohja, Seppo - 2018
-level targeting and compare it to inflation targeting. Domain of attraction of the targeted steady state gives a robustness criterion …
Persistent link: https://www.econbiz.de/10012926679
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On robustness of average inflation targeting
Honkapohja, Seppo; McClung, Nigel - 2021
This paper considers the performance of average inflation targeting (AIT) policy in a New Keynesian model with adaptive … inflation targeting policy. Policymakers can improve outcomes under AIT by (i) targeting a discounted average of inflation, or …
Persistent link: https://www.econbiz.de/10012508649