Optimal Inflation Targets, “Conservative” Central Banks, and Linear Inflation Contracts: Comment

Preprint
Publisher Website
Google Scholar
    • preprint
      • Published in RePEc
Abstract
Recently, Svensson (1997) has shown that a combination of state-contingent inflation targeting and central banker "conservatism" produces optimal monetary policy if employment is persistent. We argue that the state-contingent nature of the scheme may undermine its credibility. We then show that the optimal policy in Svensson's model can nevertheless be attained through state-independent delegation.
All Related Versions

This publication has 0 references indexed in Scilit: