The Making of Optimal and Consistent Policy: An Analytical Framework for Monetary Models

This paper shows that optimal policy and consistent policy outcomes require the use of control-theory and game-theory solution techniques. While optimal policy and consistent policy often produce different outcomes even in a one-period model, we analyze consistent policy and its outcome in a simple model, finding that the cause of the inconsistency with optimal policy traces to inconsistent targets in the social loss function. As a result, the central bank should adopt a loss function that differs from the social loss function. Carefully designing the central bank s loss function with consistent targets can harmonize optimal and consistent policy. This desirable result emerges from two observations. First, the social loss function reflects a normative process that does not necessarily prove consistent with the structure of the microeconomy. Thus, the social loss function cannot serve as a direct loss function for the central bank. Second, an optimal loss function for the central bank must depend on the structure of that microeconomy. In addition, this paper shows that control theory provides a benchmark for institution design in a game-theoretical framework.

An Activity Theoretical Approach to Designing Curriculum and Instruction That Shift the Means and Ends of History Education

Reformers want history education to help students learn to engage in historical inquiry, read critically across conflicting sources, and engage in civil discussion of controversial issues. How can we help teachers and students shift the roles, norms, and activity in history classrooms to achieve these aims? An activity-theoretical framework suggests the value of explicitly attending to multiple aspects of human activity when designing and presenting reform-oriented pedagogies or curricula. Such attention increases the odds that teachers who implement new approaches or curriculum will achieve significant shifts in the means and ends of history education.