Optimal monetary policy in a model of overlapping price contracts
This study estimates a model of overlapping nominal price contracts over three distinct monetary policy regimes, testing the stability of the parameters in the model across regimes. Upon finding a model that is stable over the three subsamples, the model then holds for the most recent monetary regime is used to compute the optimal policy frontier - the efficient combinations of output and inflation variances - and compared to actual policy performance. The study then evaluates the robustness of policy conclusions to particulars of the specification, and discusses the general properties that are required of a model in order to produce a plausible estimate of the optimal policy frontier.
|Date of creation:||1994|
|Publication status:||Published in Journal of Money, Credit and Banking 29, no. 2 (May 1997): 214-34.|
|Contact details of provider:|| Postal: 600 Atlantic Avenue, Boston, Massachusetts 02210|
Web page: http://www.bos.frb.org/
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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.:
- Jeffrey C. Fuhrer & George R. Moore, 1993.
Board of Governors of the Federal Reserve System (U.S.).
- Jeffrey C. Fuhrer & George R. Moore, 1993.
"Monetary policy and the behavior of long-term real interest rates,"
Federal Reserve Bank of San Francisco, issue Mar.
- Jeffrey C. Fuhrer, 1995. "Monetary policy and the behavior of long-term real interest rates," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 39-52.
- Jeffrey C. Fuhrer & George R. Moore, 1993. "Monetary policy and the behavior of long-term real interest rates," Finance and Economics Discussion Series 93-16, Board of Governors of the Federal Reserve System (U.S.).
- Fuhrer, Jeff & Moore, George, 1992.
"Monetary policy rules and the indicator properties of asset prices,"
Journal of Monetary Economics,
Elsevier, vol. 29(2), pages 303-336, April.
- Jeffrey C. Fuhrer & George R. Moore, 1989. "Monetary policy rules and the indicator properties of asset prices," Finance and Economics Discussion Series 89, Board of Governors of the Federal Reserve System (U.S.).
- Jeffrey C. Fuhrer & Mark A. Hooker, 1988.
"Learning about monetary regime shifts in an overlapping wage contract model,"
Finance and Economics Discussion Series
25, Board of Governors of the Federal Reserve System (U.S.).
- Fuhrer, Jeffrey C. & Hooker, Mark A., 1993. "Learning about monetary regime shifts in an overlapping wage contract model," Journal of Economic Dynamics and Control, Elsevier, vol. 17(4), pages 531-553, July.
- Anderson, Gary & Moore, George, 1985. "A linear algebraic procedure for solving linear perfect foresight models," Economics Letters, Elsevier, vol. 17(3), pages 247-252.
- Taylor, John B, 1980.
"Aggregate Dynamics and Staggered Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 88(1), pages 1-23, February.
- Taylor, John B, 1979. "Estimation and Control of a Macroeconomic Model with Rational Expectations," Econometrica, Econometric Society, vol. 47(5), pages 1267-1286, September.
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