| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP4793 |
| DP4793 When the Punishment Must Fit the Crime: Remarks on the Failure of Simple Penal Codes in Extensive-Form Games | |
| George J. Mailath; Volker Nocke; Lucy White | |
| 发表日期 | 2004-12-23 |
| 出版年 | 2004 |
| 语种 | 英语 |
| 摘要 | Erceg et al. (2000) show that when both wages and prices are sticky, maximization of expected utility is equivalent to minimizing a loss function with three terms, involving measures of the variability of wage inflation, price inflation and the output gap respectively. Here we generalize their analysis, most importantly by not assuming the existence of output and employment subsidies that eliminate the distortions resulting from market power in goods and labour markets, so that the equilibrium level of output under flexible wages and prices would not necessarily be optimal. We show that a quadratic loss function can still be justified that involves the same three terms, albeit with different relative weights and a different definition of the output gap. Many conclusions of Erceg et al. are thus found to apply more generally. We argue, however, that in the presence of significant steady-state distortions, simple rules of the kind that they examine are likely to approximate optimal policy less closely than is suggested by their numerical results. |
| 主题 | International Macroeconomics |
| 关键词 | Optimal monetary policy Sticky prices Sticky wages |
| URL | https://cepr.org/publications/dp4793 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/533706 |
| 推荐引用方式 GB/T 7714 | George J. Mailath,Volker Nocke,Lucy White. DP4793 When the Punishment Must Fit the Crime: Remarks on the Failure of Simple Penal Codes in Extensive-Form Games. 2004. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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