Monetary Policy Inclinations
نویسندگان
چکیده
We examine whether the publication of forecasts concerning the likely future conduct of monetary policy is socially desirable. Introducing a new central bank loss function that accounts for the deviations from announcements, we incorporate forecasts about future inflation and interest rates into a dynamic monetary model. We show that the announcement of future interest rates is always socially detrimental. However, medium-term inflation projections tend to increase welfare.
منابع مشابه
Estimating the Index of Monetary Policy Efficiency in a Selected Country: Pakistan
The ultimate goal of monetary policy is to achieve price stability and favorable economic growth through policy tools. The purpose of this paper is to determine the optimal monetary policy rule and measure and evaluate the effectiveness of monetary policy in an elected economy -Pakistan- with optimal control method. In this way, using Dynamic Programming, monetary policy maker's loss function ...
متن کاملThe Effectiveness of Monetary Policy in Africa: Modeling the Impact of Financial Inclusion
Abstract This study uses annual data over the period 2005-2014 and the Panel VECM approach to examine financial inclusion and monetary policy effectiveness in Africa. The study shows that financial inclusion and monetary policy effectiveness are linked by a set of long-run relationships. Policy reaction to the positive financial inclusion shock is not significant. Policy reaction to the posit...
متن کاملOptimal Cyclical Behavior of Monetary Policy of Iran: Using a DSGE Model
The countercyclical monetary policy is a policy that economists recommend to adopt in order to slow down the economic fluctuations. The aim of this study is to address the question that, in the presence of fiscal dominance and considering institutional quality (IQL), what the optimal monetary policy should be during the business cycles? To find the appropriate answer, first, in the framework of...
متن کاملHow Does Monetary Policy Affect Household Income Distribution?
Over the last decades the research on monetary policy has largely concentrated on the impact of monetary authorities’ decisions on inflation and the fine-tuning of the macroeconomic, so that distributional effects of monetary policy which are non-trivial has been ignored. A view that has become increasingly popular since the financial crisis 2008 is that expansionary monetary policy can exacerb...
متن کاملThe Impact of Monetary Policy on the Stock Market Returns and Instability: Comparison of Monetary Policy Tools in Iran
After the recent financial crisis, especially the financial crisis 2008, This raises the important question of what is the role of monetary policy in occurrence and prevention of the financial instability? so, this paper investigate the dynamics impact of monetary policy on the stock market returns and instability using Structural Vector Autoregression (SVARs) model During the period 1992:q2...
متن کامل