TY  - JOUR
AU  - Grossman,Herschel I.
TI  - A Generic Model of Monetary Policy, Inflation, and Reputation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2239
PY  - 1990
Y2  - August 1990
UR  - http://www.nber.org/papers/w2239
L1  - http://www.nber.org/papers/w2239.pdf
N1  - Author contact info:
Herschel Grossman
Department of Economics
Box B
Brown University
Providence, RI  02912
Tel: 401/863-2606
Fax: 401/863-1970
AB  - This paper analyzes a reputational equilibrium for inflation under the generic assumption that monetary policy reflects proximate preferences for low expected inflation and positive unexpected inflation. The paper stresses the qualitative implication that in a reputational equilibrium the policymaker behaves as if it is concerned about controlling inflation, even though it does not have a direct preference for a low actual inflation rate. The analysis also shows how the sovereign's prospects for survival and the private agents' memory process play critical roles in determining whether the reputational equilibrium approximates a hypothetical equilibrium with binding commitments.
ER  -