Monetary Policy InclinationsJournal of Money, Credit, and Banking (2011)
AbstractWe examine whether central banks should complement their inflation forecasts with interest rate projections. Introducing a central bank loss function that accounts for deviations from announcements, we incorporate the publication of policy inclinations into a dynamic monetary model. We show that in the presence of cost-push shocks, the publication of interest rate forecasts tends to improve welfare.
- central banks,
- Federal Reserve,
- policy inclinations,
- forward guidance
Citation InformationHans Gersbach and Volker Hahn. "Monetary Policy Inclinations" Journal of Money, Credit, and Banking Vol. 43 Iss. 8 (2011)
Available at: http://works.bepress.com/volker_hahn/8/