Time inconsistency
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Time inconsistency is the tendency of policymakers to announce policies in advance in order to influence the expectations of private decisionmakers, and then to follow different policies after those expectations have been formed and acted upon.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Time inconsistency. The tendency of policymakers to announce policies in advance in order to influence the expectations of private decisionmakers, and then to follow different policies after those expectations have been formed and acted upon.
