Excessive Activism Or Passivism of Monetary Policy? |
Common terms and phrases
ability to stabilize active or passive Banca d'Italia capture context credibility model credibility problem credibility view Cukierman and Meltzer decrease degree of policy degree of transmission denotes Devereux discretionary policy DRUDI equilibrium level ex-ante excessively active excessively passive existence of uncertainty expectations are parametric Hence implementation implies increase policy inflation aversion inflationary bias integrated model integrates credibility Letterie loss function main problem marginal costs money growth multiplicative uncertainty normative perspective notions of policy optimal degree optimal policy output growth policy effectiveness policy is excessively policy is partially policy maker chooses policy maker's losses policy maker's welfare policy uncertainty increases private agents private sector problem is ruled problem of monetary random shock random variable rational expectations reaction function reduces the policy stabilization issue stabilize the economy Swank taking expectations transmission uncertainty type of activism uncertainty depend uncertainty reduces uncertainty view welfare effects α² σ μ στ