Robust Monetary Policy with the Consumption-Wealth Channel

N/D

Autores

Araújo, Eurilton

Orientador

Co-orientadores

Citações na Scopus

Tipo de documento

Working Paper

Data

2008

Unidades Organizacionais

Resumo

This paper studies how changes in the preference for robustness(central bank's concerns about model uncertainty) and in the size of wealth effects affect the design of optimal monetary policy rules in the Blanchard-Yaari framework with sticky prices. First, I present analytical solutions by assuming that all exogenous disturbances are white noise. It is shown that an increased preference for robustness and stronger wealth effects imply more aggressive policy responses to cost shocks. In addition, the monetary policy design problem is isomorphic to the same problem in the standard New Keynesian framework. Then, I use numerical methods to study the case of persistent shocks. It is shown that an increased preference for robustness continues to imply more aggressive responses to cost shocks. By contrast, stronger wealth effects lead to less aggressive responses.

Palavras-chave

Titulo de periódico

URL da fonte

Título de Livro

URL na Scopus

Idioma

Inglês

Notas

Membros da banca

Área do Conhecimento CNPQ

Ciências Sociais Aplicadas

Citação

Avaliação

Revisão

Suplementado Por

Referenciado Por