Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of San Francisco
Working Paper Series
Optimal policy in rational-expectations models: new solution algorithms
Richard Dennis

This paper develops algorithms that solve for optimal discretionary and optimal pre-commitment policies in rational-expectations models. The techniques developed are simpler to apply than existing methods; they do not require identifying and separating predetermined variables from jump variables, and they eliminate many of the mathematical preliminaries that are required to implement existing methods. The techniques developed are applied to examples to assess the benefits of pre-commitment over discretion.

Download Full text
Cite this item
Richard Dennis, Optimal policy in rational-expectations models: new solution algorithms, Federal Reserve Bank of San Francisco, Working Paper Series 2001-09, 2001.
More from this series
JEL Classification:
Subject headings:
Keywords: Monetary policy ; Rational expectations (Economic theory)
For corrections, contact Noah Pollaczek ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal