Robust control in a sticky information economy

Giuli, Francesco (2007) Robust control in a sticky information economy. Working Paper. Dipartimento di Economia Pubblica, Università di Roma La Sapienza, Roma, Italia.


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This paper analyzes the behavior of a central bank under strong ("Knightian") uncertainty when the short run trade-off between output and inflation is represented by the Sticky Information Phillips Curve recently proposed by Mankiw and Reis (2002). By solving the robust control problem analytically, this paper elucidates the economic mechanisms at play in a sticky information economy and shows how and why the robust monetary policy in this economy differs from the optimal one identi fied by Ball, Mankiw and Reis (2005).

Item Type: Monograph (Working Paper)
Additional Information: JEL CLASSIFICATION: D81, E52, E58
Uncontrolled Keywords: Robust control, sticky information, minmax policies
Subjects: 300 Scienze sociali > 330 Economia
Depositing User: Dipartimento economia e diritto
Date Deposited: 02 Jul 2009
Last Modified: 20 May 2010 12:02

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