Abstract

We study rules based on instruments vs. targets. Our application is a New Keynesian economy where the central bank has non-contractible information about aggregate demand shocks and cannot commit to policy. Incentives are provided to the central bank via punishment which is socially costly. Instrument-based rules condition incentives on the central bank’s observable choice of policy, whereas target-based rules condition incentives on the outcomes of policy, such as inflation, which depend on both the policy choice and realized shocks. We show that the optimal rule within each class takes a threshold form, imposing the worst punishment upon violation. Target-based rules dominate instrument-based rules if and only if the central bank’s information is sufficiently precise, and they are relatively more attractive the less severe the central bank’s commitment problem. The optimal unconstrained rule relaxes the instrument threshold whenever the target threshold is satisfied.

中文翻译：

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基于工具的规则与基于目标的规则

摘要

我们研究基于工具与目标的规则。我们的应用程序是一个新的凯恩斯主义经济体，在该经济体中，中央银行拥有关于总需求冲击的非合同信息，因此无法执行政策。通过惩罚向中央银行提供激励措施，这在社会上是昂贵的。基于工具的规则以中央银行可观察的政策选择为诱因，而基于目标的规则以政策结果（例如通胀）为诱因，通货膨胀取决于政策选择和实际冲击。我们表明，每个类别中的最佳规则采用阈值形式，对违反行为施加最严重的惩罚。当且仅当中央银行的信息足够精确时，基于目标的规则才主导基于工具的规则。中央银行的承诺问题越不严重，它们就越具有吸引力。每当满足目标阈值时，最佳无约束规则都会放宽仪器阈值。