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Uncertain central bankers' preferences: some implications of multiplicative versus additive uncertainty

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  • D. A. Peel

Abstract

In this note the implications of modelling uncertainty in the parameters of the central banks loss function are examined in a multiplicative rather than additive manner. The implications for expected inflation, linear inflation contracts and targets are derived.

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  • D. A. Peel, 2000. "Uncertain central bankers' preferences: some implications of multiplicative versus additive uncertainty," Applied Economics Letters, Taylor & Francis Journals, vol. 7(12), pages 771-773.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:12:p:771-773
    DOI: 10.1080/135048500444778
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    1. Schaling, E. & Hoeberichts, M.M. & Eijffinger, S.C.W., 1998. "Incentive Contracts for Central Bankers under Uncertainty : Walsh-Svensson Non-Equivalence Revisited," Other publications TiSEM 136335cb-d3f9-4b0b-b9ec-4, Tilburg University, School of Economics and Management.
    2. Charles Nolan & Eric Schaling, 1996. "Monetary Policy Uncertainty and Central Bank Accountability," Bank of England working papers 54, Bank of England.
    3. Eijffinger, S.C.W. & Hoeberichts, M.M. & Schaling, E., 1995. "Optimal conservativeness in the Rogoff (1985) model : A graphical and closed-form solution," Discussion Paper 1995-121, Tilburg University, Center for Economic Research.
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    Cited by:

    1. Chesang, Laban K. & Naraidoo, Ruthira, 2016. "Parameter uncertainty and inflation dynamics in a model with asymmetric central bank preferences," Economic Modelling, Elsevier, vol. 56(C), pages 1-10.

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