IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/1988-088.html
   My bibliography  Save this paper

Monetary Policy Strategies

Author

Listed:
  • International Monetary Fund

Abstract

The paper considers the merits of rules and discretion for monetary policy when the structure of the macroeconomic model and the probability distributions of disturbances are not well defined. It is argued that when it is costly to delay policy reactions to seldom-experienced shocks until formal algorithmic learning has been accomplished, and when time consistency problems are significant, a mixed strategy that combines a simple verifiable rule with discretion is attractive. The paper also discusses mechanisms for mitigating credibility problems and emphasizes that arguments against various types of simple rules lose their force under a mixed strategy.

Suggested Citation

  • International Monetary Fund, 1988. "Monetary Policy Strategies," IMF Working Papers 1988/088, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1988/088
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=28862
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jacob A. Frenkel & Morris Goldstein, 1991. "Exchange Rate Volatility and Misalignment: Evaluating some Proposals for Reform," Palgrave Macmillan Books, in: Alfred Steinherr & Daniel Weiserbs (ed.), Evolution of the International and Regional Monetary Systems, chapter 8, pages 99-131, Palgrave Macmillan.
    2. M. June Flanders, 1993. "A Model of Discretion: The Gold Standard in Fact and in Fiction," The World Economy, Wiley Blackwell, vol. 16(2), pages 213-235, March.
    3. McNelis, Paul D. & Asilis, Carlos M., 1995. "Monetary policy games with broad money targets a linear quadratic control analysis of the U.S. and Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 19(5-7), pages 1091-1111.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:1988/088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.