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Implications of a changing economic structure for the strategy of monetary policy

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  • Carl E. Walsh

Abstract

This paper surveys the implications of uncertainty for the design of monetary policy. Among the topics discussed are the impact of imperfect or noisy information on the performance of simple rules, the performance of rules that are robust to the exogenous disturbance processes, the effects of parameter uncertainty, and the implications of robust control. The analysis is conducted using a new Keynesian framework. One finding is that difference rules seem to perform well in the presence of imperfect information about the output gap.

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Bibliographic Info

Article provided by Federal Reserve Bank of Kansas City in its journal Proceedings - Economic Policy Symposium - Jackson Hole.

Volume (Year): (2003)
Issue (Month): ()
Pages: 297-348

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Handle: RePEc:fip:fedkpr:y:2003:p:297-348

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Keywords: Monetary policy ; Uncertainty;

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References

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