Optimal policy with dispersed information and uncertain monetary transmission

Gianluca Femminis; Giulio Piccirilli

doi:10.1016/j.econlet.2023.111204

Optimal policy with dispersed information and uncertain monetary transmission

Gianluca Femminis^*
, Giulio Piccirilli

^*Corresponding author

Universitas Mercatorum

Research output: Contribution to journal › Article

Abstract

In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting prices. To correct the ensuing inefficiency a state-contingent fiscal policy is required. (c) 2023 Elsevier B.V. All rights reserved.

Original language	English
Pages (from-to)	111204-N/A
Number of pages	4
Journal	Economics Letters
Volume	229
DOIs	https://doi.org/10.1016/j.econlet.2023.111204
Publication status	Published - 2023

Keywords

Monetary transmission
Parameter uncertainty
Fiscal policy

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10.1016/j.econlet.2023.111204

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title = "Optimal policy with dispersed information and uncertain monetary transmission",

abstract = "In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting prices. To correct the ensuing inefficiency a state-contingent fiscal policy is required. (c) 2023 Elsevier B.V. All rights reserved.",

keywords = "Monetary transmission, Parameter uncertainty, Fiscal policy, Monetary transmission, Parameter uncertainty, Fiscal policy",

author = "Gianluca Femminis and Giulio Piccirilli",

year = "2023",

doi = "10.1016/j.econlet.2023.111204",

language = "English",

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T1 - Optimal policy with dispersed information and uncertain monetary transmission

AU - Femminis, Gianluca

AU - Piccirilli, Giulio

PY - 2023

Y1 - 2023

N2 - In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting prices. To correct the ensuing inefficiency a state-contingent fiscal policy is required. (c) 2023 Elsevier B.V. All rights reserved.

AB - In a setting with dispersed information, monopolistic competition and sticky-prices, a policy authority uncertain about the monetary transmission mechanism reacts prudently to supply shocks. This induces producers to ascribe an excessive importance to their private information when setting prices. To correct the ensuing inefficiency a state-contingent fiscal policy is required. (c) 2023 Elsevier B.V. All rights reserved.

KW - Monetary transmission

KW - Parameter uncertainty

KW - Fiscal policy

KW - Monetary transmission

KW - Parameter uncertainty

KW - Fiscal policy

UR - http://hdl.handle.net/10807/252574

U2 - 10.1016/j.econlet.2023.111204

DO - 10.1016/j.econlet.2023.111204

M3 - Article

SN - 0165-1765

VL - 229

SP - 111204-N/A

JO - Economics Letters

JF - Economics Letters

ER -

Optimal policy with dispersed information and uncertain monetary transmission

Abstract

Keywords

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