An investigation of the gains from commitment in monetary policy

• 成果类型: Article
• 署名作者: Schaumburg, Ernst; Tambalotti, Andrea
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; Northwestern University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.08.018
• 发表日期: 2007
• 页码: 302-324
• 关键词: commitment; DISCRETION; credibility; welfare

摘要

We propose a simple framework for analyzing a continuum of monetary policy rules characterized by differing degrees of credibility, in which commitment and discretion become special cases of what we call quasi-commitment. The monetary policy authority is assumed to formulate optimal commitment plans, to be tempted to renege on them, and to succumb to this temptation with a constant exogenous probability known to the private sector. By interpreting this probability as a continuous measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect of a marginal increase in credibility. Our main finding is that, in a simple model of the monetary transmission mechanism, most of the gains from commitment accrue at relatively low levels of credibility. (c) 2006 Elsevier B.V. All rights reserved.