Monetary politics and unemployment persistence

Article Abstract:

A two-period monetary policy was used to evaluate the impact of persistent unemployment to a nation's monetary policy. It was revealed that credibility problems tend to generate high inflation fluctuations under an economy where unemployment rate follows an autoregressive process. Further, strong chances of electoral failure prompts a government to adopt an expansionary monetary policy. In the same way, an electorate's overview of an upcoming monetary policy determines the outcome of an election. Credibility problems arising from these trends can be addressed through a state-dependence performance contract between the government and the central bank.

Administration of General Economic Programs, Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Labor Regulation & Services, Currency Stabilization Programs, Elections, Unemployment, Labor policy, Currency stabilization

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Evaluating alternative monetary policy rules

Article Abstract:

The best monetary policy rule for the Federal Reserve has been the subject of many studies. In examining monetary policy from an optimal control perspective, five loss functions are minimized for each of five models, which include two small structural models, two vector autoregression models and a large structural model. While the basic loss function focuses on inflation and unemployment, the other loss functions will target inflation alone, unemployment alone, nominal growth alone and real growth alone, respectively.

Economic policy, United States. Federal Reserve Board

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Are non-fundamental equilibria learnable in models of monetary policy?

Article Abstract:

An analysis of the instability displayed in the models of monetary policy is presented.

United Kingdom

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