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ERIC Number: EJ922820
Record Type: Journal
Publication Date: 2007
Pages: 8
Abstractor: As Provided
Reference Count: 17
ISSN: ISSN-0022-0485
A Graphical Exposition of the Inconsistency of Optimal Monetary Plans
Steindl, Frank G.
Journal of Economic Education, v37 n3 p340-347 2007
The author presents a geometrical framework in which the inability of discretionary policy (consistent policy in the sense of Kydland and Prescott) to be socially optimal is demonstrated. Policy based on a rule results in a higher level of utility. The author extends the model to demonstrate that policy of a Rogoff conservative central banker results in approaching the same equilibrium as that from a monetary rule. Finally, the framework shows that attempts to exploit the Phillips curve result in stagflation. (Contains 3 figures, 1 table and 7 notes.)
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A