| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP14540
|
| DP14540 Should central banks be forward-looking? |
| Paul De Grauwe; Yuemei Ji
|
| 发表日期 | 2020-03-28
|
| 出版年 | 2020
|
| 语种 | 英语
|
| 摘要 | We show that in a world where agents have limited cognitive abilities and, as a result, are prevented from having rational expectations the answer to this question is negative. We find that in “tranquil periods” when market sentiments (animal spirits) are neutral a forward-looking Taylor rule produces similar results as current-looking Taylor rule in terms of output and inflation volatility. However, when the economy is in a regime of booms and bust produced by extreme values of animal spirits the forward-looking central bank will make many policy errors that have to be corrected afterwards. Thus in a regime of extreme uncertainty the use of a forward Taylor rule reduces the quality of policy-making, leading to greater variability of the output and inflation. It is then better for the central bank to use currently observed output and inflation to set the interest rate. The empirical evidence suggests that central banks are often not forward looking. Our model provides the theoretical justification for this. |
| 主题 | Monetary Economics and Fluctuations
|
| 关键词 | Taylor rule
Behavioural macroeconomics
Animal spirits
|
| URL | https://cepr.org/publications/dp14540
|
| 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/543445
|
推荐引用方式
GB/T 7714 |
Paul De Grauwe,Yuemei Ji. DP14540 Should central banks be forward-looking?. 2020.
|
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