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Monetary Policy and Potential Output Uncertainty: A Quantitative Assessment

  • Simona Delle Chiaie

    ()

    (University of Rome, Tor Vergata)

This paper contributes to the recent literature that studies the quantitative implications of the imperfect information about potential output for the conduct of monetary policy. By means of Bayesian techniques, a small New Keynesian model is estimated taking explicitly account of the imperfect information problem. The estimation of the structural parameters and of the monetary authorities.objectives is key in assessing the quantitative relevance of the imperfect information problem and in evaluating the robustness of previous exercises based on calibration. Finally, the model allows us to analyse the usefulness of unit labor costs as monetary policy indicator.

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File URL: ftp://www.ceistorvergata.it/repec/rpaper/No-94.pdf
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Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 94.

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Length: 34
Date of creation: 20 Feb 2007
Date of revision:
Handle: RePEc:rtv:ceisrp:94
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  18. Jordi Galí & Mark Gertler & David López-Salido, 2005. "Robustness of the Estimates of the Hybrid New Keynesian Phillips Curve," Banco de Espa�a Working Papers 0520, Banco de Espa�a.
  19. Jesús Fernández-Villaverde & Juan F. Rubio, 2003. "Comparing Dynamic Equilibrium Economies to Data," Levine's Working Paper Archive 506439000000000309, David K. Levine.
  20. Linde, Jesper, 2005. "Estimating New-Keynesian Phillips curves: A full information maximum likelihood approach," Journal of Monetary Economics, Elsevier, vol. 52(6), pages 1135-1149, September.
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