UNSPECIFIED (1997) Rogoff's ''conservative'' central banker restored. JOURNAL OF MONEY CREDIT AND BANKING, 29 (4 Part 1). pp. 476-495. ISSN 0022-2879.

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Abstract

We show that delegation of monetary policy to a weight-conservative central banker can be desirable, although the government can also use an inflation contract, an employment target, an inflation target, or any combination of these to control the central banker. The key feature of our model is a stochastic inflation bias, arising when wage setters receive some information about a supply shock prior to signing nominal wage contracts. Weight-conservatism is found to be desirable if fully state-contingent delegation is not possible and the stochastic inflation bias cannot be eliminated by optimal choice of the delegation parameters.

Item Type:	Journal Article
Subjects:	H Social Sciences > HG Finance H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	JOURNAL OF MONEY CREDIT AND BANKING
Publisher:	OHIO STATE UNIV PRESS
ISSN:	0022-2879
Official Date:	November 1997
Dates:	Date Event November 1997 UNSPECIFIED
Volume:	29
Number:	4 Part 1
Number of Pages:	20
Page Range:	pp. 476-495
Publication Status:	Published

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