Adaptive learning, forecast-based instrument rules and monetary policy

• 成果类型: Article
• 署名作者: Preston, Bruce
• 署名单位: Columbia University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.01.008
• 发表日期: 2006
• 页码: 507-535
• 关键词: Monetary policy; forecasts; instrument rules; adaptive learning

摘要

This paper argues that recently popular forecast-based instrument rules for monetary policy may fail to stabilize economic fluctuations. In a New Keynesian model of output gap and inflation determination in which private agents face multi-period decision problems, but have non-rational expectations and learn over time, if the monetary authority adopts a forecast-based instrument rule and responds to observed private forecasts then this class of policies frequently induce divergent learning dynamics. A central bank that correctly understands private behavior can mitigate such instability by responding to the determinants of private forecasts. This suggests gathering information on the determinants of expectations to be useful. (c) 2006 Elsevier B.V. All rights reserved.