The source of uncertainty and optimal monetary policy
- Authors
- Cho, Daeha; Oh, Joonseok
- Issue Date
- Jun-2023
- Publisher
- Elsevier B.V.
- Keywords
- Uncertainty shocks; Optimal monetary policy
- Citation
- Economics Letters, v.227, pp.1 - 5
- Indexed
- SSCI
SCOPUS
- Journal Title
- Economics Letters
- Volume
- 227
- Start Page
- 1
- End Page
- 5
- URI
- https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/192483
- DOI
- 10.1016/j.econlet.2023.111131
- ISSN
- 0165-1765
- Abstract
- We study optimal monetary policy in response to the cost-push uncertainty shock, which is a second-moment shock, in a textbook New Keynesian model. Following a cost-push uncertainty shock, optimal monetary policy faces a trade-off between output gap and inflation stabilization. This is because, even in the absence of first-moment cost-push shocks, cost-push uncertainty generates a time-varying gap between natural output and efficient output. These results contrast with those under a conventional productivity uncertainty shock, which leads to complete stabilization of the output gap and inflation.
- Files in This Item
-
Go to Link
- Appears in
Collections - 서울 경제금융대학 > 서울 경제금융학부 > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/192483)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.