Sophisticated Monetary Policies * 1. a Simple Model with One-period Price Stickiness
Sophisticated Monetary Policies * 1. a Simple Model with One-period Price Stickiness
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复杂的货币政策 * 1. 具有单期价格粘性的简单模型
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通讯作者:
P. Kehoe
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作者:
A. Atkeson;V. Chari;P. Kehoe
The Ramsey approach to policy analysis finds the best competitive equilibrium given a set of available instruments. This approach is silent about unique implementation, namely designing policies so that the associated competitive equilibrium is unique. This silence is particularly problematic in monetary policy environments where many ways of specifying policy lead to indeterminacy. We show that sophisticated policies which depend on the history of private actions and which can differ on and off the equilibrium path can uniquely implement any desired competitive equilibrium. A large literature has argued that monetary policy should adhere to the Taylor principle to eliminate indeterminacy. Our findings say that adherence to the Taylor principle on these grounds is unnecessary. Finally, we show that sophisticated policies are robust to imperfect information.cial support and Kathleen Rolfe for excellent editorial assistance. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. Frank Ramsey proposed a now classic approach to policy analysis under commitment. This approach speci…es the set of instruments available to policymakers. The Ramsey problem is to …nd the competitive equilibrium that maximizes social welfare with the given set of instruments. Barro (1979), Lucas and Stokey (1983) among many others have extended this approach to situations with uncertainty by specifying the instruments as functions of exogenous events. This extension has made the approach very useful in addressing policy questions in macroeconomics 1. While the Ramsey approach has been very useful in characterizing the best competitive outcomes, by itself it is not an operational guide to policy in the sense that it does not tell policy-makers how to conduct policy for all possible histories. An approach that is an operational guide would specify policies for every history and would describe what the corresponding outcomes will be for every history. Here we extend the language of Chari and Kehoe (1993) to an environment in which the policymaker has commitment in order to specify policies after every history and to describe continuation outcomes after every history. In our approach, we allow policies to depend on the history of past actions by private agents and allow them to di¤er on and o¤ the equilibrium path. We label such policies sophisticated policies and label the resulting equilibrium a sophisticated equilibrium. In many macroeconomic models, especially monetary models, many ways of specifying policies lead to indeterminacy and therefore …