Reflections on the failure of the Taylor principle under commitment

Emanuel Barnea; Nissan Liviatan

doi:10.1016/j.econlet.2011.02.031

Reflections on the failure of the Taylor principle under commitment

Emanuel Barnea, Nissan Liviatan

Research output: Contribution to journal › Article › peer-review

Abstract

We offer an explanation of why optimal policy under commitment requires weaker reaction to supply shock, reflected in the failure of the Taylor principle. This lesson seems to be prevalent among central banks and yet has been analyzed incomprehensively in the economic literature.

Original language	English
Pages (from-to)	71-74
Number of pages	4
Journal	Economics Letters
Volume	112
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2011.02.031
State	Published - Jul 2011
Externally published	Yes

Keywords

Commitment
Discretion
Taylor principle

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2011.02.031

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title = "Reflections on the failure of the Taylor principle under commitment",

abstract = "We offer an explanation of why optimal policy under commitment requires weaker reaction to supply shock, reflected in the failure of the Taylor principle. This lesson seems to be prevalent among central banks and yet has been analyzed incomprehensively in the economic literature.",

keywords = "Commitment, Discretion, Taylor principle",

author = "Emanuel Barnea and Nissan Liviatan",

year = "2011",

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Reflections on the failure of the Taylor principle under commitment

Abstract

Keywords

ASJC Scopus subject areas

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