Robust Monetary Policy with the Cost Channel
Bibliographic Data
| ID | 9725303 |
|---|---|
| Authors | PETER TILLMANN (0000-0002-3267-9842, University of Bonn, corresponding author) |
| Year | 2009 |
| Volume | 76 |
| Issue | 303 |
| Pages | 486-504 |
| Publication date | 2009-07-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/j.1468-0335.2008.00697.x |
| OpenAlex | W2168838676 |
| Language | EN |
| Citations received | 1 |
| References cited | 17 |
Recent research argues that model uncertainty leads the central bank to adjust interest rates stronger to exogenous disturbances than under certainty. This paper investigates whether the introduction of a cost channel of monetary transmission, whose presence is empirically supported, changes the impact of model uncertainty on interest rate setting. The model is simple enough to facilitate an analytical solution. I find that the presence of the cost channel dampens the effect of model uncertainty on interest rate setting and can offset the activist policy stance. A richer model that allows for persistent supply and demand shocks corroborates these findings
Certainty · Channel (broadcasting) · Credit channel · Econometrics · Economics · Inflation targeting · Interest rate · Microeconomics · Monetary economics · Monetary policy · Offset (computer science) · Simple (philosophy) · Telecommunications · Computer Science · Global Financial Crisis and Policies · Italy: Economic History and Contemporary Issues · Monetary Policy and Economic Impact
| Citations per year | 0.2 |
|---|---|
| Citation span | 2021 - 2021 (1) |
| Highly cited | No |