Time consistency, asymmetric information and monetary policy design: an overview
Article Abstract:
The institutional implications of several literature on the optimal institutional framework of monetary policy, in relation to the asymmetric information game theory, are examined. Earlier studies on finding reputational equilibria, the possibilities of utilizing announcements to affect expectations and the principal-agent approach to the institutional design of monetary policy were also clarified. The study concluded that institutional reforms for independent central banks with a mandate for price stability are not consistent with recommendations from the theory.
Publication Name: De Economist
Subject: Economics
ISSN: 0013-063X
Year: 1996
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The information content of the yield curve for monetary policy: a survey
Article Abstract:
A review of the theoretical arguments on the information content of the yield curve with respect to future inflation and real economic activity reveals that the curve has information but the information is difficult to distinguish between the effects of real interest rates and future inflation. Moreover, the study also reveals that the yield spread is a stable leading indicator for future real economic activity but is open to various interpretations.
Publication Name: De Economist
Subject: Economics
ISSN: 0013-063X
Year: 1998
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Central banking in a democratic society
Article Abstract:
An analysis of monetary policy in a low-inflation environment and in a democratic setting reveals that monetary policy is important and that strategies for opportunistic disinflation are based on poorly tested hypotheses. Moreover, the study also reveals that cautious expansionism is more preferable to opportunistic disinflation and that central banks should be accountable and sensitive to democratic processes.
Publication Name: De Economist
Subject: Economics
ISSN: 0013-063X
Year: 1998
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