Optimal term length for an overconfident central banker

Farvaque, Etienne; Matsueda, Norimichi

Document type :

Compte-rendu et recension critique d'ouvrage

DOI :

10.1142/s0217590816500107

Title :

Optimal term length for an overconfident central banker

Author(s) :

Farvaque, Etienne [Auteur]

Lille économie management - UMR 9221 [LEM]
Matsueda, Norimichi [Auteur]

Journal title :

The Singapore Economic Review

Pages :

179--192

Publisher :

World Scientific Publishing Co Pte Ltd

Publication date :

2017-03

ISSN :

0217-5908

English keyword(s) :

Central banker
overconfidence
legal mandate
optimal term length

HAL domain(s) :

Sciences de l'Homme et Société/Economies et finances

English abstract : [en]

This paper discusses the implications of overconfidence when it affects a monetary policy maker. We consider two forms of overconfidence: the illusion of precision and the illusion of control. Incorporating them into a ...
Show more >This paper discusses the implications of overconfidence when it affects a monetary policy maker. We consider two forms of overconfidence: the illusion of precision and the illusion of control. Incorporating them into a standard New Keynesian framework, we consider the optimal term length of a central banker and examine how it depends on the types and degrees of overconfidence. In particular, we show that the legal mandate should always be lengthened when these two types of biases increase by the same percentage magnitude.Show less >

Language :

Anglais

Popular science :

Non

Collections :

Lille Économie Management (LEM) - UMR 9221

Source :

Harvested from HAL

Files

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