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Is the Walsh Contract Really Optimal?
Francisco Candel-Sánchez and Juan Cristóbal Campoy-Miñarro
Vol. 120, No. 1/2 (Jul., 2004), pp. 29-39
Published by: Springer
Stable URL: http://www.jstor.org/stable/30025828
Page Count: 11
You can always find the topics here!Topics: Central banking, Economic inflation, Central banks, Inflation rates, Monetary policy, Utility functions, Social biases, Bankers acceptances, Expected utility, Marginal costs
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The purpose of this paper is to show that the linear penalization to inflation found in Walsh (1995) is not the government's optimal choice when the fixed part of the transfer scheme is any given constant and the payment to the central bank represents a cost for the government.
Public Choice © 2004 Springer