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The Use and Abuse of Taylor Rules: How Precisely Can We Estimate Them?

  • Alina Carare
  • Robert Tchaidze

    (International School of Economics at Tbilisi State University)

This paper draws attention to inconsistencies in estimating simple monetary policy rules and their implications for policy advice. We simulate a macroeconomic model with a backward reaction function similar to Taylor (1993). We estimate different versions of a policy rule, using these simulated data.

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File Function: First version, 2008
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Paper provided by International School of Economics at TSU, Tbilisi, Republic of Georgia in its series Working Papers with number 006-08.

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Length: 30 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:tbs:wpaper:08-006
Contact details of provider: Web page: http://www.iset.ge/

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