Øistein Røisland

Learn More
Inflation targeting regimes define a performance measure for the central bank. A regime that places a large (small) weight on achieving the target is analogous to a high (low) powered incentive scheme. High-powered incentive structures promote accountability but may distort stabilization policy. The optimal power under inflation targeting is derived under(More)
A discretionary monetary policy leads to sub-optimal stabilization in models with the New Keynesian assumption of forward-looking price setting, and various policy rules that improve the discretionary equilibrium have been considered in the literature. The empirical evidence for forward-looking price determination is mixed. This note shows, however, that(More)
Working papers from 1999 onwards are available on www.norges-bank.no Norges Bank's working papers present research projects and reports (not usually in their final form) and are intended inter alia to enable the author to benefit from the comments of colleagues and other interested parties. Views and conclusions expressed in working papers are the(More)
Working papers from 1999 onwards are available on www.norges-bank.no Norges Bank's working papers present research projects and reports (not usually in their final form) and are intended inter alia to enable the author to benefit from the comments of colleagues and other interested parties. Views and conclusions expressed in working papers are the(More)
This paper analyses time-inconsistency problems related to the exchange rate channel of monetary policy. Within a simple open-economy macroeconomic model, where the exchange rate is the only forward-looking variable, we show that a difference emerges between optimal policy under discretion and under commitment. Moreover, the nature of the time-inconsistency(More)
This paper extends previous research on simple inflation-forecast targeting by considering its effect in the open economy. It discusses the effect of the forecast-targeting horizon on interest rates and the exchange rate, and moreover what role it plays in determining the rational expectations equilibrium. Inflation-forecast targeting may not comply with(More)
The typical judgment aggregation problem in economics and other …elds is the following: A group of people has to judge/estimate the value of an uncertain variable y which is a function of k other variables, i.e. y = D(x 1 ; :::x k). We analyze when it is possible for the group to arrive at collective judgements on the variables that respect D. We consider(More)
This paper develops a basic model for output fluctuations in traded and non-traded sectors under two alternative monetary policy regimes; exchange rate targeting (or monetary union) and inflation targeting. The conventional wisdom from one-sector models says that inflation targeting gives better output stabilization than exchange rate targeting when demand(More)
Setting the interest rate in an inflation targeting regime requires a total assessment, often translated into forecasts, of the outlook for inflation and real activity. In the assessment process, it is useful to have some references or cross-checks, in terms of simple rules. Although simple rules should not be followed mechanically, they provide a device(More)