Animal spirits and optimal monetary policy design in the presence of labour market frictions

作者：Sheen Jeffrey; Wang Ben Zhe

来源：Economic Modelling, 2016, 52: 898-912.

DOI：10.1016/j.econmod.2015.10.028

Using a New Keynesian DSGE model with labour market frictions, we compare outcomes for backward-looking animal spirits expectations with rational expectations after technology and demand shocks. For optimal monetary policy, major differences arise only for technology shocks, and discretionary policy performs better than commitment policy under animal spirits expectations. If Taylor rule parameters are chosen to best replicate optimal monetary policy outcomes, inflation targeting is only appropriate for technology shocks, particularly for large labour frictions, while targeting only economic activity is appropriate for demand shocks. Fault tolerance analysis shows high costs from failing to identify true animal spirits expectations and technology shocks.

• 出版日期2016-1