Optimal monetary policy in economies with "sticky-information" wages
By: Evan F. Koenig.
Series: Research Department working paper ;; 0405; Working paper (Federal Reserve Bank of Dallas. Research Dept. : Online) ;; 0405.
Publisher: Federal Reserve Bank of Dallas
Published: 2004
Place of publication: [Dallas, Tx.]
Language: eng
Format: Electronic resource
Subjects: Monetary policy -- Econometric models.
Description: "In economies with sticky-information wage setting, policymakers legitimately give attention to output stabilization as well as price-level or inflation stabilization. Consistent with Kydland and Prescott (1990), trend deviations in prices are predicted to be negatively correlated with trend deviations in output. A variant of the Taylor rule is optimal if household consumption decisions are forward-looking. Interestingly, it is essential that policy not be made contingent on the most up-to-date estimates of potential output, potential-output growth, or the natural real interest rate. New results on the "persistence problem" and a new rationalization for McCallum's P-bar inflation equation are also presented"--Federal Reserve Bank of Dallas web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/19/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.