Explain the Time Inconsistency of Monetary Policy

question 88

Essay

Explain the time inconsistency of monetary policy.

---

Definitions:

Cognitive Appraisal Process

The mental process of interpreting and evaluating a situation or event, which then determines the emotional reaction to that situation or event.

Heart Disease

A broad term for any condition affecting the heart or blood vessels, often related to atherosclerosis or buildup of plaque in the arteries.

Hostile

Showing or feeling opposition or dislike; unfriendly or antagonistic.

Immune Disorder

A condition in which the body's immune system behaves abnormally, either failing to protect the body effectively or attacking its own tissues.