Estimated rules for monetary policy
Estimated policy rules describe how monetary policy has responded in the past to key economic indicators. Such rules can be used to evaluate past decisions and help guide the appropriate path for current policy. ; However, there may be unique features of a given economic situation—such as the current binding zero lower bound on interest rates and the desire to manage downside risk to economic activity—that warrant flexibility in following any rule based on past performance. ; Kahn estimates what rules best describe past monetary policies that coincided with periods of favorable economic performance. A rule placing somewhat greater weight on inflation than on output in determining a setting for the federal funds rate describes policy well over these periods and could be a useful guide in the future.
Volume (Year): (2012)
Issue (Month): Q IV ()
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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.:
- Evan F. Koenig, 2004.
"Monetary policy prospects,"
Economic and Financial Policy Review,
Federal Reserve Bank of Dallas, pages 1-16.
- Laurence Ball, 1997.
"Efficient rules for monetary policy,"
Reserve Bank of New Zealand Discussion Paper Series
G97/3, Reserve Bank of New Zealand.
- Fabio Canova, 2004.
"What explains the Great Moderation in the US? A structural analysis,"
Economics Working Papers
919, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2007.
- Fabio Canova, 2009. "What Explains The Great Moderation in the U.S.? A Structural Analysis," Journal of the European Economic Association, MIT Press, vol. 7(4), pages 697-721, 06.
- George A. Kahn, 2010. "Taylor rule deviations and financial imbalances," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 63-99.
- Roberto M. Billi & George A. Kahn, 2008. "What is the optimal inflation rate?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 5-28.
- Pier Francesco Asso & George A. Kahn & Robert Leeson, 2007. "The Taylor rule and the transformation of monetary policy," Research Working Paper RWP 07-11, Federal Reserve Bank of Kansas City.
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