The Delphic forward guidance puzzle in New Keynesian models

Ippei Fujiwara, Yuichiro Waki

研究成果: Article査読

抄録

When the central bank has information that can help the private sector better predict the future, should it communicate such information to the public? In purely forward-looking New Keynesian models, such Delphic forward guidance unambiguously reduces ex ante welfare by increasing the variability of inflation and the output gap. We call this phenomenon the Delphic forward guidance puzzle. In more elaborate models with endogenous state variables, a combination of Delphic forward guidance and preemptive policy actions may improve welfare. However, full information revelation is generally not optimal and what information needs to be revealed is highly model-dependent.

本文言語English
ページ(範囲)280-301
ページ数22
ジャーナルReview of Economic Dynamics
46
DOI
出版ステータスPublished - 2022 10月

ASJC Scopus subject areas

  • 経済学、計量経済学

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