Should monetary policy respond to private sector expectations?

Michele Berardi

MPRA Paper from University Library of Munich, Germany

Abstract: This work analyses the implications, in terms of determinacy and E-stability of equilibrium, of a policy rule that responds to private sector expectations in forward looking models. In the literature, this type of policy has been both recommended and criticized. We try to understand the reasons for such di¤erent conclusions and shed some light on the desirability of this type of policy rules.

Keywords: Monetary policy; expectations; learning; determinacy; E- stability. (search for similar items in EconPapers)
JEL-codes: C62 D84 E52 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19285

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