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- Title
Monetary policy and private sector misperceptions about the natural level of output.
- Authors
Jääskelä, Jarkko; McKeown, Jack
- Abstract
This article presents information on a model, which provides some knowledge into the consequences for monetary policy design of problems the private sector in estimating the natural level of output. In the article the author uses a model with two agents, a private sector and a policymaker. The private sector bases its behaviour on its perception of the sustainable level of output and on its awareness of the objectives. The policymaker sets policy to keep inflation balanced around an inflation target and to keep output balanced around its supportable level.
- Subjects
MONETARY policy; PRIVATE sector; ECONOMIC policy; PRICE inflation; GOVERNMENT policy; FISCAL policy
- Publication
Bank of England Quarterly Bulletin, 2005, Vol 45, Issue 4, p475
- ISSN
0005-5166
- Publication type
Article