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:	Affine term structure; General equilibrium; Time-varying term premiums; Monetary policy; Discretion vs. commitment
Online Access:	available in Bonn?
Database:	RePEc RePEc IDEAS Database information Databases - DBIS