NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Severe is the Time Inconsistency Problem in Monetary Policy?

Stefania Albanesi, V.V. Chari, Lawrence J. Christiano

NBER Working Paper No. 8139
Issued in February 2001
NBER Program(s):   EFG

We analyze two monetary economies - a cash-credit good model and a limited participation model. In our models, monetary policy is made by a benevolent policymaker who cannot commit to future policies. We define and analyze Markov equilibrium in these economies. We show that there is no time inconsistency problem for a wide range of parameter values.

download in pdf format
   (383 K)

email paper

This paper is available as PDF (383 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8139

Published: Albanesi, Stefania, V. V. Chari and Lawrence J. Christiano. "How Severe Is The Time-Inconsistency Problem In Monetary Policy?," FRB Minneapolis - Quarterly Review, 2003, v27(3,Summer), 17-33.

Users who downloaded this paper also downloaded these:
Bhattacharya and Lakdawalla w10345 Time-Inconsistency and Welfare
Barro and Gordon w1079 Rules, Discretion and Reputation in a Model of Monetary Policy
Mishkin w6965 International Experiences with Different Monetary Policy Regimes
Bernanke and Mishkin w5893 Inflation Targeting: A New Framework for Monetary Policy?
McCallum w5075 Two Fallacies Concerning Central Bank Independence
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us