Arbeitspapier
Robust Delegation with Uncertain Monetary Policy Preferences
Recent research has renewed interest in the exploration of the optimal design of monetary policy institutions in the presence of uncertainty. In this paper, we revisit the rationale for delegation to a weight-conservative central banker when the social planner’s knowledge about the true preferences of delegates is ex ante ambiguous and he exhibits a preference for robustness. In this context, a robust (worst-case oriented) delegation strategy is intended to minimize the maximum welfare loss over the uncertainty set, when no prior probability distribution for the preference bias (conservatism-gap) is available. We find that both over and underconservatism may emerge with respect to the certainty case, for robust delegation is shown to be model-dependent. Most importantly, under reasonable model’s parameterizations, Rogoff’s principle is reversed: it is optimal for society to appoint a weight-liberal central banker.
- Sprache
-
Englisch
- Erschienen in
-
Series: EERI Research Paper Series ; No. 05/2012
- Klassifikation
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Thema
-
Delegation
Conservative central bank
Preference uncertainty
Minmax policy
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Sorge, Marco M.
- Ereignis
-
Veröffentlichung
- (wer)
-
Economics and Econometrics Research Institute (EERI)
- (wo)
-
Brussels
- (wann)
-
2012
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Sorge, Marco M.
- Economics and Econometrics Research Institute (EERI)
Entstanden
- 2012
Ähnliche Objekte (12)
Monetary policy with uncertain parameters
Monetary policy with uncertain parameters
Stable Matching with Uncertain Linear Preferences
Monetary policy under uncertain planning horizon
Uncertain potential output : implications for monetary policy
Uncertain potential output: implications for monetary policy
Robust control : systems with uncertain physical parameters
Robust Wagner-Whitin algorithm with uncertain costs
German economy remaining robust in uncertain times
German economy remaining robust in uncertain times
Robust Wagner–Whitin algorithm with uncertain costs
A novel best worst method robust data envelopment analysis: Incorporating decision makers' preferences in an uncertain environment
Monetary policy with uncertain parameters
Monetary policy with uncertain parameters
Stable Matching with Uncertain Linear Preferences
Monetary policy under uncertain planning horizon
Uncertain potential output : implications for monetary policy
Uncertain potential output: implications for monetary policy
Robust control : systems with uncertain physical parameters
Robust Wagner-Whitin algorithm with uncertain costs
German economy remaining robust in uncertain times
German economy remaining robust in uncertain times
Robust Wagner–Whitin algorithm with uncertain costs
A novel best worst method robust data envelopment analysis: Incorporating decision makers' preferences in an uncertain environment
Monetary policy with uncertain parameters
Monetary policy with uncertain parameters
Stable Matching with Uncertain Linear Preferences
Monetary policy under uncertain planning horizon
Uncertain potential output : implications for monetary policy
Uncertain potential output: implications for monetary policy
Robust control : systems with uncertain physical parameters
Robust Wagner-Whitin algorithm with uncertain costs
German economy remaining robust in uncertain times
German economy remaining robust in uncertain times
Robust Wagner–Whitin algorithm with uncertain costs