Prof. YEUNG Wing Kay, DavidDavidProf. YEUNG Wing Kay2021-03-062021-03-061990In Dynamic modelling and control of national economies 1989, selected papers from the 6th IFAC symposium, pp. 61-67.9780080375380http://hdl.handle.net/20.500.11861/6487In a Stackelberg Incentive Model, a monetary rule in the form of an incentive function is derived as an optimal strategy. A Stackelberg Incentive Equilibrium is solved for the widely used Barro-Gordon unemployment-inflation game. A dynamic version of the model is also considered. An equilibrium incentive strategy (a monetary rule) that leads to a team optimal solution of zero expected inflation and zero actual inflation is obtained. Providing a formal game equilibrium foundation for monetary rules may: (i) remove the policymaker's incentive to deviate from the rule, and (ii) incite private agents to perceive monetary rules as credible policies.enConference Paper10.1016/B978-0-08-037538-0.50016-2