Refine
Document Type
- Working Paper (2)
- Preprint (1)
Language
- English (3)
Has Fulltext
- yes (3)
Is part of the Bibliography
- no (3)
Keywords
- Commitment (3) (remove)
Institute
The paper considers optimal monetary stabilization policy in a forward-looking model, when the central bank recognizes that private-sector expectations need not be precisely model-consistent, and wishes to choose a policy that will be as good as possible in the case of any beliefs that are close enough to model-consistency. It is found that commitment continues to be important for optimal policy, that the optimal long-run inflation target is unaffected by the degree of potential distortion of beliefs, and that optimal policy is even more history-dependent than if rational expectations are assumed. JEL Classification: E52, E58, E42
I characterize optimal monetary and fiscal policy in a stochastic New Keynesian model when nominal interest rates may occasionally hit the zero lower bound. The benevolent policymaker controls the short-term nominal interest rate and the level of government spending. Under discretionary policy, accounting for fiscal stabilization policy eliminates to a large extent the welfare losses associated with the presence of the zero bound. Under commitment, the gains associated with the use of the fiscal policy tool remain modest, even though fiscal stabilization policy is part of the optimal policy mix.
We review the representation problem based on factoring and show that this problem gives rise to alternative solutions to a lot of cryptographic protocols in the literature. And, while the solutions so far usually either rely on the RSA problem or the intractability of factoring integers of a special form (e.g., Blum integers), the solutions here work with the most general factoring assumption. Protocols we discuss include identification schemes secure against parallel attacks, secure signatures, blind signatures and (non-malleable) commitments.