On Robust Monetary Policy with Structural Uncertainty Discussion of John C. Williams’ “Robust Estimation and Monetary Policy with Unobserved Structural Change”
نویسنده
چکیده
It is a pleasure to help honor my friends and former colleagues Dale Henderson, Dick Porter, and Peter Tinsley, by discussing Williams' fine paper and the important ongoing research program to which it contributes, all of which is very much in the Henderson-Porter-Tinsley tradition of path-breaking application of optimal control methods to the conduct of monetary policy. The recent robust control literature in general, and Williams' paper in particular, hits a very sweet spot. First, it has an beautiful theoretical purity, very much the latest step in the rigorous and stunningly influential prediction and control program of Weiner, Kolmogorov, The essence of robust control is acknowledgment and incorporation of model uncertainty in optimal control. 1 Effectively, the robust control framework is a flexible and powerful laboratory for exploring local perturbations to rational expectations.
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