Behavioural Macroeconomic Policy: New perspectives on time inconsistency

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Tác giả: Michelle Baddeley

Ngôn ngữ: eng

Ký hiệu phân loại: 339.5 Macroeconomic policy

Thông tin xuất bản: 2019

Mô tả vật lý:

Bộ sưu tập: Báo, Tạp chí

ID: 163116

Comment: 12 pagesThis paper brings together divergent approaches to time inconsistency from macroeconomic policy and behavioural economics. Behavioural discount functions from behavioural microeconomics are embedded into a game-theoretic analysis of temptation versus enforcement to construct an encompassing model, nesting combinations of time consistent and time inconsistent preferences. The analysis presented in this paper shows that, with hyperbolic/quasihyperbolic discounting, the enforceable range of inflation targets is narrowed. This suggests limits to the effectiveness of monetary targets, under certain conditions. The paper concludes with a discussion of monetary policy implications, explored specifically in the light of current macroeconomic policy debates.
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