Evans, George W.

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https://hdl.handle.net/1794/3690

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Browsing Evans, George W. by Subject "Commitment"

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    Adaptive Learning and Monetary Policy Design
    (University of Oregon, Dept. of Economics, 2002-11-08) Evans, George W., 1949-; Honkapohja, Seppo, 1951-
    We review the recent work on interest rate setting, which emphasizes the desirability of designing policy to ensure stability under private agent learning. Appropriately designed expectations based rules can yield optimal rational expectations equilibria that are both determinate and stable under learning. Some simple instrument rules and approximate targeting rules also have these desirable properties. We take up various complications in implementing optimal policy, including the observability of key variables and the required knowledge of structural parameters. An additional issue that we take up concerns the implications of expectation shocks not arising from transitional learning effects.
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    Monetary Policy, Expectations and Commitment
    (University of Oregon, Dept of Economics, 2005-04-06) Evans, George W., 1949-; Honkapohja, Seppo, 1951-
    This is a revised and shortened version of Working Paper 2002-11. Commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies. A number of interest rate reaction functions and instrument rules have been proposed to implement or approximate commitment policy. We assess these rules in terms of whether they lead to an RE equilibrium that is both locally determinate and stable under adaptive learning by private agents. A reaction function that appropriately depends explicitly on private expectations performs particularly well on both counts.
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    Monetary policy, expectations and commitment
    (University of Oregon, Dept. of Economics, 2002-05-22) Evans, George W., 1949-; Honkapohja, Seppo, 1951-
    Commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies. A number of interest rate reaction functions and instrument rules have been proposed to implement or approxmiate commitment policy. We assess these optimal reaction functions and instrument rules in terms of whether they lead to an RE equilibrium that is both locally determinate and stable under adaptive learning by private agents. A reaction function that appropriately depends explicitly on private expectations performs well on both counts.