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|Material Type:||Document, Internet resource|
|Document Type:||Internet Resource, Computer File|
|All Authors / Contributors:||
Michael Woodford; National Bureau of Economic Research.
|Notes:||Hardcopy version available to institutional subscribers.
|Description:||1 online resource.|
|Series Title:||Working paper series (National Bureau of Economic Research), no. w11896.|
Abstract: The main qualitative conclusions of the rational-expectations analysis of optimal policy carry over to the weaker assumption of near-rational expectations. 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.