User Account

All Pages

Compute the ex-post optimal monetary policy

Assignment Help Microeconomics
Reference no: EM13867784

1. Consider the following model:

Notation: t denotes time, y denotes output, is the potential output, e is the nominal exchange rate, U is the government's utility function, is money growth, E expectations operator. is the inflation at time t.

a) Explain how inflation and output are determined in the model, in particular, discuss government preferences about output and inflation. Also explain the determination of the nominal exchange rate in this model.

b) Show that the ex-ante optimal policy implies that government will announce zero inflation and a constant exchange rate.

c) Compute the ex-post optimal monetary policy and the consequences for nominal exchange rate. Explain your results

d) Compute the optimal monetary policy, when the government decides to delegate the monetary policy in a conservative central bank with thefollowing objective function . Show that a fixed exchange rate could be used to solve the time- inconsistency problem. Explain your results.

Reference no: EM13867784

Questions Cloud

What is glen philosophy in his profession : What is Glen's philosophy in his profession? What is he trying to communicate through his art? How does Glen's work differ from other artists'? What is your own personal feelings about this artist's work
Compute the plastic moment for strong : Problem 1: Compute the plastic moment for strong axis bending, Mpx, of the Tee section shown below.
What is the largest constant consumption stream : What is the largest constant consumption stream you can afford?
Find the median and the first quartiles for the time : Find the median and the first and third quartiles for the time it took employees using public transportation. Develop a box plot for the information.
Compute the ex-post optimal monetary policy : Compute the ex-post optimal monetary policy
Analyze the economic impact of major social problems : Analyze the economic impact of major social problems and issues
How will confidentiality of your subjects be maintained : What is your research hypothesis? Who will be the participants in your study? How will they be recruited to participate? How will confidentiality of your subjects be maintained? How will you identify data associated with each participant
Is p3 the long-run equilibrium price? : Is P3 the long-run equilibrium price?
How will confidentiality of your subjects be maintained : What is your research hypothesis? Who will be the participants in your study? How will they be recruited to participate? How will confidentiality of your subjects be maintained? How will you identify data associated with each participant

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd