TY  - UNPD
A1  - Beck, Günter W.
A1  - Wieland, Volker
T1  - Central bank misperceptions and the role of money in interest rate rules
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2008,25
N2  - Research with Keynesian-style models has emphasized the importance of the output gap for policies aimed at controlling inflation while declaring monetary aggregates largely irrelevant. Critics, however, have argued that these models need to be modified to account for observed money growth and inflation trends, and that monetary trends may serve as a useful cross-check for monetary policy. We identify an important source of monetary trends in form of persistent central bank misperceptions regarding potential output. Simulations with historical output gap estimates indicate that such misperceptions may induce persistent errors in monetary policy and sustained trends in money growth and inflation. If interest rate prescriptions derived from Keynesian-style models are augmented with a cross-check against money-based estimates of trend inflation, inflation control is improved substantially.
T3  - CFS working paper series - 2008, 25 
KW  - Taylor Rules
KW  - Money
KW  - Quantity Theory
KW  - Output Gap Uncertainty
KW  - Monetary
KW  - Policy Under Uncertainty
KW  - Haushalt
KW  - Einkommen
KW  - Anreiz
Y1  - 2008
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/5825
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-57630
ER  -