The optimal degree of monetary discretion in a new Keynesian model with private information
研究了央行基于私人信息制定政策且无法承诺时，社会应如何通过设定通胀上下限来授予央行最优的“受限自由度”，发现最优自由度随时间不一致问题的严重程度而变化。
This paper considers the optimal degree of monetary discretion when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time, and the central bank takes these restrictions and the new Keynesian Phillips curve as constraints. By solving a dynamic mechanism design problem, we find that it is optimal to grant “constrained discretion” to the central bank by imposing both upper and lower bounds on permissible inflation, and that these bounds should be set in a history‐dependent way. The optimal degree of discretion varies over time with the severity of the time‐inconsistency problem, and although no discretion is optimal when the time‐inconsistency problem is very severe, it is a transient phenomenon and some discretion is granted eventually.