Generalizing the Taylor Principle: Reply
Farmer, Waggoner, and Zha (2009) (FWZ) show that a new Keynesian model with regime-switching monetary policy can support multiple solutions, appearing to contradict findings in Davig and Leeper (2007) (DL). The explanation is straightforward: FWZ derive solutions using a model that differs from the one to which the DL conditions apply. The FWZ solutions also require that the exogenous driving process is a function of private and policy parameters. This undermines the sharp distinctions among "deep parameters" typical of optimizing models and makes it difficult to ascribe economic interpretations to FWZ's additional solutions. (E12, E31, E43, E52)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 100 (2010)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: https://www.aeaweb.org/aer/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
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.:
- Davig, Troy, 2004. "Regime-switching debt and taxation," Journal of Monetary Economics, Elsevier, vol. 51(4), pages 837-859, May.
- Svensson, Lars E. O. & Williams, Noah, 2005.
"Monetary policy with model uncertainty: distribution forecast targeting,"
Discussion Paper Series 1: Economic Studies
2005,35, Deutsche Bundesbank, Research Centre.
- Svensson, Lars E O & Williams, Noah, 2007. "Monetary Policy with Model Uncertainty: Distribution Forecast Targeting," CEPR Discussion Papers 6331, C.E.P.R. Discussion Papers.
- Lars Svensson & Noah Williams, 2005. "Monetary Policy with Model Uncertainty: Distribution Forecast Targeting," NBER Working Papers 11733, National Bureau of Economic Research, Inc.
- Noah Williams & Lars E.O. Svensson, 2005. "Monetary Policy with Model Uncertainty: Distribution Forecast Targeting," Computing in Economics and Finance 2005 108, Society for Computational Economics.
- Troy A. Davig & Eric M. Leeper, 2006.
"Endogenous monetary policy regime change,"
Research Working Paper
RWP 06-11, Federal Reserve Bank of Kansas City.
- Troy Davig & Eric M. Leeper, 2006. "Endogenous Monetary Policy Regime Change," NBER Working Papers 12405, National Bureau of Economic Research, Inc.
- Troy Davig & Eric M. Leeper, 2006. "Endogenous Monetary Policy Regime Change," Caepr Working Papers 2006-002, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Troy A. Davig, 2007. "Phillips curve instability and optimal monetary policy," Research Working Paper RWP 07-04, Federal Reserve Bank of Kansas City.
- Troy A. Davig & Taeyoung Doh, 2008.
"Monetary policy regime shifts and inflation persistence,"
Research Working Paper
RWP 08-16, Federal Reserve Bank of Kansas City.
- Troy Davig & Taeyoung Doh, 2014. "Monetary Policy Regime Shifts and Inflation Persistence," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 862-875, December.
- Taeyoung Doh & Troy Davig, 2009. "Monetary Policy Regime Shifts and Inflation Persistence," 2009 Meeting Papers 182, Society for Economic Dynamics.
- Thomas A. Lubik & Frank Schorfheide, 2004.
"Testing for Indeterminacy: An Application to U.S. Monetary Policy,"
American Economic Review,
American Economic Association, vol. 94(1), pages 190-217, March.
- Thomas Lubik & Frank Schorfheide, 2002. "Testing for Indeterminacy:An Application to U.S. Monetary Policy," Economics Working Paper Archive 480, The Johns Hopkins University,Department of Economics, revised Jun 2003.
- Sargent, Thomas J, 1981.
"Interpreting Economic Time Series,"
Journal of Political Economy,
University of Chicago Press, vol. 89(2), pages 213-48, April.
- Branch, William A. & Davig, Troy & McGough, Bruce, 2013. "Adaptive Learning In Regime-Switching Models," Macroeconomic Dynamics, Cambridge University Press, vol. 17(05), pages 998-1022, July.
- Roger E. A. Farmer & Daniel F. Waggoner & Tao Zha, 2008.
"Generalizing the Taylor principle: comment,"
FRB Atlanta Working Paper
2008-19, Federal Reserve Bank of Atlanta.
- Troy Davig & Eric M. Leeper, 2007.
"Fluctuating Macro Policies and the Fiscal Theory,"
in: NBER Macroeconomics Annual 2006, Volume 21, pages 247-316
National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:100:y:2010:i:1:p:618-24. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.