Evaluating Alternative Monetary Policy Rules
AbstractThis paper examines monetary policy from an optimal control perspective. Three loss functions are minimized for each of three models, and the results are compared. The three loss functions target nominal growth, real growth, and inflation, respectively. The three models are a small structural model, a VAR model, and a large structural model. A numerical procedure is presented that can handle a variety of loss functions and models.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1091.
Length: 21 pages
Date of creation: Feb 1995
Date of revision:
Publication status: Published in Journal of Monetary Economics (1996), 38: 173-193
Note: CFP 940.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
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94-26, Federal Reserve Bank of Philadelphia.
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