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The Use and Abuse of Taylor Rules: How Precisely Can We Estimate Them?

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  • Alina Carare
  • Robert Tchaidze

    (International School of Economics at Tbilisi State University)

Abstract

This paper draws attention to inconsistencies in estimating simple monetary policy rules and their implications for policy advice. We simulate a macroeconomic model with a backward reaction function similar to Taylor (1993). We estimate different versions of a policy rule, using these simulated data.

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File URL: http://www.iset.ge/files/006-08.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by International School of Economics at TSU, Tbilisi, Republic of Georgia in its series Working Papers with number 006-08.

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Length: 30 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:tbs:wpaper:08-006

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