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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
Symmetric versus asymmetric central bank preferences

Symmetric versus asymmetric central bank preferences

Kobbi, Imen

Paperback

Business General

ISBN10: 6209749631
ISBN13: 9786209749636
Publisher: Our Knowledge Publishing
Published: Mar 12 2026
Pages: 60
Weight: 0.21
Height: 0.14 Width: 6.00 Depth: 9.00
Language: English
This book presents an analysis of two distinct theoretical approaches from the vast literature on modeling central bank preferences. The first advocates the use of symmetric quadratic loss functions. This approach stands out for the ease of analytical resolution it introduces into models considered complex, but it can be criticized for neglecting uncertainty by supporting the principle of certainty equivalent and for reflecting the symmetry of central bank preferences towards deviations of target variables from their targets. In this regard, a second, more realistic approach, which emerged in the late 1990s, allows this criticism to be overcome. The latter assumes the asymmetry of the central bank's preferences and allows uncertainty to be taken into account. As a result, the principle of certainty equivalent proves inappropriate and the central banker must adopt a cautious approach to uncertainty in accordance with Brainard's (1967) principle of prudence, which allows uncertainty to affect real and nominal economic variables.

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