Optimal monetary policy with uncertain private sector foresight

• 成果类型: Article
• 署名作者: Gust, Christopher; Herbst, Edward; Lopez-Salido, David
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2025.103826
• 发表日期: 2025
• 关键词: Finite-horizon planning; Optimal monetary policy under uncertainty

摘要

We model private-sector expectations in a finite-horizon-planning framework: households and firms have limited foresight when making spending, saving, and pricing decisions. In this setting, contrary to standard New Keynesian (NK) models, we show that an inflation scare problem can arise in which agents' longer-run inflation expectations deviate persistently from a central bank's inflation target. We characterize optimal time-consistent monetary policy when there is uncertainty about the planning horizons of private sector agents and a risk of inflation scares. We show how risk-management considerations modify the optimal leaning-against-the-wind principle in the NK literature with a novel, additional preemptive motive to avert inflation scares.