Arbeitspapier
Robust monetary policy in the New-Keynesian framework
We study the effects of model uncertainty in a simple New-Keynesian model using robust control techniques.Due to the simple model structure, we are able to find closed-form solutions for the robust control problem, analysing both instrument rules and targeting rules under different timing assumptions.In all cases but one, an increased preference for robustness makes monetary policy respond more aggressively to cost shocks but leaves the response to demand shocks unchanged.As a consequence, inflation is less volatile and output is more volatile than under a non-robust policy.Under one particular timing assumption, however, increasing the preference for robustness has no effect on the optimal targeting rule (nor on the economy).
- ISBN
-
952-462-186-X
- Sprache
-
Englisch
- Erschienen in
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Series: Bank of Finland Discussion Papers ; No. 31/2004
- Klassifikation
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
Open Economy Macroeconomics
- Thema
-
Knightian uncertainty
model uncertainty
robust control
min-max policies
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Leitemo, Kai
Söderström, Ulf
- Ereignis
-
Veröffentlichung
- (wer)
-
Bank of Finland
- (wo)
-
Helsinki
- (wann)
-
2004
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Leitemo, Kai
- Söderström, Ulf
- Bank of Finland
Entstanden
- 2004
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