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- W1527390270 abstract "This paper investigates the role of the degree of heterogeneity of central bankers’ preferences in the output-inflation tradeoff. It builds a game theoretic model of monetary policy with inflation targets not set by the monetary authority and with uncertainty about the preferences of the central banker. Under reasonable assumptions, the model shows that in countries with greater dispersion in the distribution of central bankers’ preferences, as it is the case in a number of developing nations, monetary policy has to be tougher to convince society of the central banker’s commitment to controlling inflation. The model also shows that inflation targets have a role in anchoring expectations even when the central banker highly values output expansions. The paper also presents empirical evidence supporting the model’s results. JEL Classification: E52, E58, C72" @default.
- W1527390270 created "2016-06-24" @default.
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- W1527390270 date "2006-10-01" @default.
- W1527390270 modified "2023-09-27" @default.
- W1527390270 title "Heterogeneity of Central Bankers and Inflationary Pressure" @default.
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