Is the Walsh Contract Really Optimal?

In: Public choice, Band 120, Heft 1-2, S. 29-39

Abstract

The purpose of this paper is to show that the linear penalization to inflation found in Walsh (1995) is not the government's optimal choice when the fixed part of the transfer scheme is any given constant & the payment to the central bank represents a cost for the government. 1 Figure, 1 Appendix, 15 References. Adapted from the source document.