The timing of shocks matters in optimal monetary policy
Abstract
This study explores optimal monetary policy in an economy with seasonal wage staggering. The findings reveal that the slope of the Phillips curve and the weights in the welfare loss function systematically differ by quarter. Consequently, optimal policy responses vary depending on the timing of shocks within a calendar year. However, implementing history-dependent policy rules can effectively mitigate much of the welfare deterioration that would otherwise occur when policymakers fail to adopt these quarter-specific optimal policy responses.
Fields of Study & Subjects
Monetary Policy and Economic Impact
Global Financial Crisis and Policies
Economic theories and models
Publication details
- Journal / source
- Journal of Monetary Economics
- Publisher
- Elsevier BV
- Volume
- 158
- Pages
- 103896–103896
- Publication date
- 14 January 2026
- Language
- EN