Optimal Monetary Policy Rules from a Timeless Perspective

On the Robustness of Simple and Optimal Monetary Policy Rules

This is a discussion of the paper "Simple versus Optimal Rules as Guides to Policy" by Brock, Durlauf, Nason and Rondina (BDNR) presented in November 2006 at Carnegie-Mellon University under the auspices of the Carnegie-Rochester Conference Series on Public Policy. I review the authors’arguments, present a few suggestions for extension and outline where I think at least one strand of the litera...

Jointly optimal monetary and fiscal policy rules under liquidity constraints

In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: JEL classification: E32 E52 E62 E63 Keywords: Optimal simple policy rules Timeless perspective optimal policy Monetary polic...

Optimal Monetary Policy Rules When the Current Account Matters

Bank of Chile. We thank P. García, L. O. Herrera, J. Marshall, K. Schmidt-Hebbel, R. Vergara, and participants in the Third Annual Conference of the Central Bank of Chile, “Monetary Policy: Rules and Transmission Mechanisms”, for helpful comments. All remaining errors are our responsibility. This paper presents the views of the authors and does not necessarily represent in any way the positions...

1 Optimal Monetary Policy

We re-examine optimal monetary policy when lump-sum taxes are unavailable. Under commitment, we show that, with alternative utility functions to that considered in Nicolini’s related analysis, the direction of the incentive to cheat may depend on the initial level of government debt, with low debt creating an incentive towards surprise deflation, but high debt the reverse. Under discretion, we ...

Optimal Monetary Stabilization Policy∗