Optimal policy and Taylor rule cross-checking under parameter uncertainty : [Version 26 September 2013]

We examine whether the robustifying nature of Taylor rule cross-checking under model uncertainty carries over to the case of parameter uncertainty. Adjusting monetary policy based on this kind of cross-checking can impro
We examine whether the robustifying nature of Taylor rule cross-checking under model uncertainty carries over to the case of parameter uncertainty. Adjusting monetary policy based on this kind of cross-checking can improve the outcome for the monetary authority. This, however, crucially depends on the relative welfare weight that is attached to the output gap and also the degree of monetary policy commitment. We find that Taylor rule cross-checking is on average able to improve losses when the monetary authority only moderately cares about output stabilization and when policy is set in a discretionary way.
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Metadaten
Author:Dirk Bursian, Markus Roth
URN:urn:nbn:de:hebis:30:3-317864
URL:http://ssrn.com/abstract=2320426
DOI:http://dx.doi.org/10.2139/ssrn.2320426
Parent Title (German):SAFE working paper series ; No. 30
Series (Serial Number):SAFE working paper series (30)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2013
Year of first Publication:2013
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2013/10/10
Tag:Optimal monetary policy; Taylor rule; parameter uncertainty
Issue:Version 26 September 2013
Pagenumber:35
Last Page:31
HeBIS PPN:348853831
Institutes:Wirtschaftswissenschaften
House of Finance (HoF)
Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:E47 Forecasting and Simulation
E52 Monetary Policy
E58 Central Banks and Their Policies
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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