Time Consistency and Optimal Policy Design

Time Consistency and Optimal Policy Design

Optimal Learning under Robustness and Time-Consistency

We model learning in a continuous-time Brownian setting where there is prior ambiguity. The associated model of preference values robustness and is timeconsistent. The model is applied to study optimal learning when the choice between actions can be postponed, at a per-unit-time cost, in order to observe a signal that provides information about an unknown parameter. The corresponding optimal st...

Imperfect Information, Optimal Monetary Policy and Informational Consistency

This paper examines the implications of imperfect information (II) for optimal monetary policy with a consistent set of informational assumptions for the modeller and the private sector an assumption we term the informational consistency. We use an estimated simple NK model from Levine et al. (2012), where the assumption of symmetric II significantly improves the fit of the model to US data to ...

Imperfect Information, Optimal Monetary Policy and the Informational Consistency Principle∗

This paper examines the implications of imperfect information for optimal monetary policy with a consistent set of informational assumptions for the modeller and the private sector. The assumption that agents have no more information than the economist who constructs and estimates the model on behalf of the policymaker, amounts to what we term the informational consistency principle. We use an ...

An optimal policy for deteriorating items with time-proportional deterioration rate and constant and time-dependent linear demand rate

In this paper, an economic order quantity (EOQ) inventory model for a deteriorating item is developed with the following characteristics: (i) The demand rate is deterministic and two-staged, i.e., it is constant in first part of the cycle and linear function of time in the second part. (ii) Deterioration rate is time-proportional. (iii) Shortages are not allowed to occur. The o...