Cross-Checking Monetary Policy and Stabilization Bias

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  • 金融政策のクロスチェックと安定化バイアス
  • キンユウ セイサク ノ クロスチェック ト アンテイカ バイアス

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Abstract

The present paper examines how cross-checking monetary policy can overcome a stabilization bias associated with discretionary policy. The findings of this paper are summarized as follows. First, the gain from employing cross-checking optimal monetary policy is considerably affected by the slope of the new Keynesian Phillips curve (NKPC). The gain from a cross-checking optimal policy is larger when the slope of the NKPC flattens. By contrast，the gain diminishes as the slope of the NKPC becomes steeper. Second, this study also investigates whether the persistence of a cost-push shock affects the gain from the cross-checking monetary policy and shows that the gain from the policy increases when a cost-push shock becomes more persistent. The gain is negligible when there is a temporary cost-push shock.

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