The advantages and disadvantages of an unconditional policy commitment Introduction: Unconditional policy commitment represents anunspokenassurance by the central bank, which could be destabilising if the conditions change. It is a decision or policy commitment that is literally not tied or influenced by a condition or a situation but is rather hinged on predicted estimates or forecasts.

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Chapter 18, Problem 19Q

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The advantages and disadvantages of an unconditional policy commitment

Introduction:

Unconditional policy commitment represents anunspokenassurance by the central bank, which could be destabilising if the conditions change. It is a decision or policy commitment that is literally not tied or influenced by a condition or a situation but is rather hinged on predicted estimates or forecasts.

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