Measuring the Time Inconsistency of US Monetary Policy

Alternative Conditions to Time Inconsistency Equilibrium of an International Monetary Policy

Monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. The foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. Expectations in Finn K...

Measuring Systematic Monetary Policy

The 1970s and early 1980s witnessed two main approaches to the analysis of monetary policy. The first is the early new classical approach of Lucas, based on the assumptions of rational expectations and market clearing. The second is the atheoretical econometrics of Sims’s VAR program. Both have developed: the new classical approach has been enriched through various accounts of price stickiness,...

Time-Varying Monetary Policy Reaction Function: The Case of Iran

alternative conditions to time inconsistency equilibrium of an international monetary policy

â  monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. the foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. expectations in fin...

How stable are monetary policy rules: estimating the time-varying coefficients in monetary policy reaction function for the US

We consider the relation among the federal funds rate and the Federal Reserve’s expectations for future inflation, the future gap between actual and potential output, and the future foreign exchange value of the U.S. dollar. The coefficients of this relation are biased when relevant explanatory variables are omitted and/or when the included explanatory variables are measured with error. This pr...