Bond Risk Premiums and Optimal Monetary Policy

The bond yield dynamics implied by a welfare-maximizing monetary policy and its credibility are explored in general equilibrium. Credibility is captured by a regime change from discretion to commitment. The policy determines the optimal output and inflation responses to a source of inflation risk. B...

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Bibliographic details
Volume: 15
Main Author: Palomino, Francisco
Format: Journal Article
Language: English
Place of publication: Elsevier for the Society for Economic Dynamics 2012
published in: Review of Economic Dynamics Vol. 15; no. 1; pp. 19 - 40
Data of publication: 2012
Series: Review of Economic Dynamics
Subjects:
Online Access: available in Bonn?
Database: RePEc
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