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Policy futures markets with multiple goals

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  • Jackson, Aaron L.

Abstract

Previous work in monetary policy futures markets under a single policy goal have shown this approach to be effective at eliminating the circularity problem inherent with private-sector targeting strategies. We extend this monetary policy setting framework to a typical multiple goal policy objective: inflation and output stabilization. We also demonstrate how the prices in policy futures markets can help resolve debates over important policy questions.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 32 (2010)
Issue (Month): 1 (March)
Pages: 45-54

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Handle: RePEc:eee:jmacro:v:32:y:2010:i:1:p:45-54

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Web page: http://www.elsevier.com/locate/inca/622617

Related research

Keywords: Policy futures market Forecast targeting Monetary targets Prediction markets Information markets;

References

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  1. Bennett T. McCallum & Edward Nelson, 1998. "Performance of operational policy rules in an estimated semi-classical structural model," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
  2. Bennett T. McCallum, 1997. "Issues in the Design of Monetary Policy Rules," NBER Working Papers 6016, National Bureau of Economic Research, Inc.
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  4. repec:reg:rpubli:259 is not listed on IDEAS
  5. Justin Wolfers & Eric Zitzewitz, 2004. "Prediction Markets," Discussion Papers 03-025, Stanford Institute for Economic Policy Research.
  6. Lars E. O. Svensson, 1997. "Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets," NBER Working Papers 5797, National Bureau of Economic Research, Inc.
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  11. Markus Knell & Helmut Stix, 2004. "Three Decades of Money Demand Studies. Some Differences and Remarkable Similarities," Working Papers 88, Oesterreichische Nationalbank (Austrian Central Bank).
  12. Lars E. O. Svensson, 1999. "Inflation Targeting: Some Extensions," NBER Working Papers 5962, National Bureau of Economic Research, Inc.
  13. Stephen G. Cecchetti & Michael Ehrmann, 1999. "Does Inflation Targeting Increase Output Volatility? An International Comparison of Policymakers' Preferences and Outcomes," NBER Working Papers 7426, National Bureau of Economic Research, Inc.
  14. Robert L. Hetzel, 1990. "Maintaining price stability: a proposal," Economic Review, Federal Reserve Bank of Richmond, issue Mar, pages 53-55.
  15. Justin Wolfers & Eric Zitzewitz, 2006. "Five Open Questions About Prediction Markets," NBER Working Papers 12060, National Bureau of Economic Research, Inc.
  16. Dowd, Kevin, 1994. "A Proposal to End Inflation," Economic Journal, Royal Economic Society, vol. 104(425), pages 828-40, July.
  17. Michael Woodford, 1994. "Nonstandard Indicators for Monetary Policy: Can Their Usefulness Be Judged from Forecasting Regressions?," NBER Chapters, in: Monetary Policy, pages 95-115 National Bureau of Economic Research, Inc.
  18. Sumner, Scott, 1989. "Using Futures Instrument Prices to Target Nominal Income," Bulletin of Economic Research, Wiley Blackwell, vol. 41(2), pages 157-62, April.
  19. Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-34, April.
  20. Aaron L. Jackson & Scott Sumner, 2006. "Velocity Futures Markets: Does the Fed Need a Structural Model?," Economic Inquiry, Western Economic Association International, vol. 44(4), pages 716-728, October.
  21. Alan S. Blinder & John Morgan, 2008. "Do Monetary Policy Committees Need Leaders? A Report on an Experiment," American Economic Review, American Economic Association, vol. 98(2), pages 224-29, May.
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