Monetary Policy Under Discretion Or Commitment?: -An Empirical Study
2013 (English)Report (Other academic)
In this paper, I investigate the monetary policy of five industrialized countries which
have had explicit inflation targets for more than 15 years. Considering the case of dis-
cretionary policy as well as commitment, I estimate two first order conditions. The
results support the theory of flexible iflation targeting under discretion for the United
Kingdom. For New Zealand, the results under discretion suggests that monetary poli-
cymakers have been leaning with the wind rather than against the wind. The central
banks of Canada, Sweden, and Australia have behaved in line with the theory of flex-
ible inflation targeting under commitment.
Place, publisher, year, edition, pages
Uppsala: Uppsala universitet, 2013. , 57 p.
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2013:8
Ination targeting, optimal policy under discretion, optimal policy under commitment
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-199751OAI: oai:DiVA.org:uu-199751DiVA: diva2:621061