Open AccessOptimal Monetary Policy Rules from a Timeless Perspective
Author(s) -
Tatiana Damjanovic,
Vladislav Damjanovic,
Charles R. Nolan
Publication year - 2005
Publication title -
ssrn electronic journal
Language(s) - English
Resource type - Journals
ISSN - 1556-5068
DOI - 10.2139/ssrn.827264
Subject(s) - timeless , perspective (graphical) , monetary policy , economics , monetary economics , neuroscience , computer science , psychology , artificial intelligence , circadian rhythm
The timelessly optimal monetary policy proposed by Woodford (2003) may be dominated by alternative timeless policies. We provide a formal justification for these alternative policies. We demonstrate why discount rates do not matter and establish that optimizing over the unconditional expectation of the policy criterion function recovers these alternative strategies.
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