Animal spirits, confidence and monetary policy - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Chapitre D'ouvrage Année : 2007

Animal spirits, confidence and monetary policy

Résumé

The paper discusses the ways an independent Central Bank committed to medium term achievement of a mixed objective can manage its short term degrees of freedom. We suppose imperfect and asymmetric information between a Bank playing leader in a Stackelberg game and agents reacting to its initiatives. Agents are heterogeneous according their inflationary expectations and their aversion to inflation: once combined those two characteristics determine the relative weight of bulls and bears in the economy. Central Banks adapts its dynamical path to the initial distribution of opinions, but also influences inflation aversion and animal spirits by its previous actions. The style of monetary policy the Bank chooses to implement is not independent of the nature and the transformation of opinions of Agents. This policy can be of a Lucasian style: in this case, the Bank through its actions has to convince agents that there is an inverse relationship between inflation and growth. It can as well be of a renewed Phillips' style: in this case, agents consider that, even in a world where time-inconsistencies are not costless, an adequate level of inflation does not preclude growth. These two kinds of monetary policies are both associated to the gradual improvement of the confidence that Central bank is able to generate during its medium term mandate.
Fichier non déposé

Dates et versions

halshs-00484085 , version 1 (17-05-2010)

Identifiants

  • HAL Id : halshs-00484085 , version 1

Citer

Muriel Dal-Pont Legrand, Dominique Torre, Tosi Elise. Animal spirits, confidence and monetary policy. P. Arestis, and Zezza. Advances in Monetary Policy and Macroeconomics, Palgrave MacMilan, 2007. ⟨halshs-00484085⟩
76 Consultations
0 Téléchargements

Partager

Gmail Facebook X LinkedIn More