Imperfect Knowledge and Monetary Policy (Hardcover)

Otmar Issing

ISBN 10: 0521854865 / ISBN 13: 9780521854863

Published by Cambridge University Press, Cambridge, 2006

About this Item

Hardcover. Based on lectures given as part of The Stone Lectures in Economics, this book discusses the problem of formulating monetary policy in practice, under the uncertain circumstances which characterize the real world. The first lecture highlights the limitations of decision rules suggested by the academic literature and recommends an approach involving, first, a firm reliance on the few fundamental and robust results of monetary economics and, secondly, a pragmatic attitude to policy implementation, taking into consideration lessons from central banking experience. The second lecture revisits Milton Friedman's questions about the effects of active stabilization policies on business cycle fluctuations. It explores the implications of a simple model where the policy maker has imperfect knowledge about potential output and the private sector forms expectations according to adaptive learning. This lecture shows that imperfect knowledge limits the scope for active stabilization policy and strengthens the case for conservatism. This book discusses the problem of formulating monetary policy in practice, under the uncertain circumstances which characterize the real world. Key questions are discussed both with reference to the experience of the Bundesbank and of the European Central Bank and in relation to a simple stylized economic model. This item is printed on demand. Shipping may be from our UK warehouse or from our Australian or US warehouses, depending on stock availability.

Seller Inventory # 9780521854863

Bibliographic Details

• Title: Imperfect Knowledge and Monetary Policy (Hardcover)
• Publisher: Cambridge University Press, Cambridge
• Publication Date: 2006
• Language: English
• ISBN 10: 0521854865
• ISBN 13: 9780521854863
• Binding: Hardcover
• Condition: new

About this title

Synopsis

Based on lectures given as part of The Stone Lectures in Economics, this book discusses the problem of formulating monetary policy in practice, under the uncertain circumstances which characterize the real world. How should central banks set monetary policy? In which way should they take uncertainty into account when designing a monetary policy strategy? Should they respond to shocks aggressively or cautiously? These questions are discussed both with reference to the experience of the Bundesbank and of the European Central Bank and in relation to a simple stylized economic model.

About the Authors

Otmar Issing is a member of the Executive Board, European Central Bank.

Vítor Gaspar is Special Advisor, Banco de Portugal.

Oreste Tristani is Principal Economist, DG Research, European Central Bank.

David Vestin is Economist, DG Research, European Central Bank.