Optimal Monetary Policy Rules for Averting Productivity Induced Jobless Recoveries
AbstractAlthough high productivity growth is a primary economic goal across nations, it can lead to short run adjustment problems when it temporarily achieves high levels. This may induce a jobless recovery when labor productivity is high while an economy is experiencing sluggish growth or a recession. This paper creates a framework for empirically modeling these effects. This model is used in the context of an optimal control framework in order to derive policy rules for guiding monetary policy during such episodes.
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Bibliographic InfoArticle provided by Review of Applied Economics in its journal Review of Applied Economics.
Volume (Year): 2 (2006)
Issue (Month): 2 ()
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Web page: http://www.lincoln.ac.nz/story11874.html
monetary policy rules; productivity gains; Financial Economics; E52; E61; E65;
Find related papers by JEL classification:
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
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- Ireland, Peter N, 1996. "The Role of Countercyclical Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 704-23, August.
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