Explicit instrument versus targeting rules in the backward-looking model
AbstractIn the backward-looking model, an explicit instrument rule is almost as efficient as a target rule. An explicit instrument rule leads to a more stable real rate of interest and hence an output stabilization bias compared to the target rule.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 106 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/ecolet
Optimal monetary policy Target rule Explicit instrument rule Stabilization bias Interest rate volatility;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bennett T. McCallum & Edward Nelson, 2005.
"Targeting versus instrument rules for monetary policy,"
Board of Governors of the Federal Reserve System (U.S.), pages 225-245.
- Bennett T. McCallum & Edward Nelson, 2005. "Targeting versus instrument rules for monetary policy," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 597-612.
- Lars E. O. Svensson, 2003.
"What Is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules,"
Journal of Economic Literature,
American Economic Association, vol. 41(2), pages 426-477, June.
- Lars E. O. Svensson, 2003. "What is Wrong with Taylor Rules? Using Judgment in Monetary Policy through Targeting Rules," NBER Working Papers 9421, National Bureau of Economic Research, Inc.
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