The Effect of Discounting on Policy Choices in Inflation Targeting Regimes

Satchi, Mathan and Henry, S.G.B. and Vines, David (2006) The Effect of Discounting on Policy Choices in Inflation Targeting Regimes. Economic Journal, 116 (508). pp. 266-282. ISSN 0013-0133. E-ISSN 1468-0297. (doi:10.1111/j.1468-0297.2006.01056.x) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

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Official URL
http://dx.doi.org/10.1111/j.1468-0297.2006.01056.x

Abstract

This article assesses the implications of discounting on a result derived by Bean (1998) : that in a model of monetary policy where policy acts with a lag, the outcomes of monetary policy are very similar for a wide range of preferences of the monetary authority with respect to inflation and output stability. We show that when the authority discounts the future, outcomes become more sensitive to its preferences, and that it is important to take the discount rate into account when examining the question of how the authority's remit should be specified.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: C. Hudson
Date Deposited: 19 Dec 2007 18:19 UTC
Last Modified: 24 May 2016 11:42 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/544 (The current URI for this page, for reference purposes)
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