TY  - JOUR
AU  - Albanesi,Stefania
AU  - Chari,V.V.
AU  - Christiano,Lawrence J.
TI  - How Severe is the Time Inconsistency Problem in Monetary Policy?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8139
PY  - 2001
Y2  - February 2001
UR  - http://www.nber.org/papers/w8139
L1  - http://www.nber.org/papers/w8139.pdf
N1  - Author contact info:
Stefania Albanesi
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
Tel: 212 720 5443
E-Mail: stefania.albanesi@gmail.com

Varadarajan V. Chari
Department of Economics
University of Minnesota
1035 Heller Hall
271 - 19th Avenue South
Minneapolis, MN 55455
Tel: 612/626-5171
Fax: (612) 624-0209
E-Mail: varadarajanvchari@gmail.com

Lawrence Christiano
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-8231
Fax: 847/491-7001
E-Mail: l-christiano@northwestern.edu
AB  - 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.
ER  -