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Dynamic specifications in optimizing trend-deviation macro models

  • Sharon Kozicki
  • P.A. Tinsley

As noted in surveys by Goodfriend and King (1997) and Walsh (1998) and exemplified by models analyzed in Taylor (1999), there is encouraging progress in developing optimizing trend-deviation macro models that provide useful insights into the transmission and design of monetary policy. Several controversial features of a minimalist trend-deviation model, with optimizing households, firms, and bond traders, are examined. Dynamic specifications are suggested to improve the data-based realism, while preserving the simplicity, of the minimalist model.

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Paper provided by Federal Reserve Bank of Kansas City in its series Research Working Paper with number RWP 01-03.

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Date of creation: 2001
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Handle: RePEc:fip:fedkrw:rwp01-03
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  46. repec:sae:niesru:v:145:y::i:1:p:43-63 is not listed on IDEAS
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