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 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.
| Author: | Dirk BursianGND, Markus Roth |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-317864 |
| URL: | http://ssrn.com/abstract=2320426 |
| DOI: | https://doi.org/10.2139/ssrn.2320426 |
| Parent Title (German): | SAFE working paper series ; No. 30 |
| Series (Serial Number): | SAFE working paper (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 |
| Page Number: | 35 |
| Last Page: | 31 |
| HeBIS-PPN: | 348853831 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
