Implications of parameter uncertainty for monetary policy in a simple Euro area model
The 'Brainard conservatism principle' states that the optimal monetary policy rule should be less aggressive when uncertainty about parameters is taken into account. However, this principle is not fully general and may be reversed in some cases. This paper examines the implications of parameter uncertainty for monetary policy using a simple empirical model of the Euro area. The Brainard principle is found to be empirically relevant.
Year of publication: |
2002
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Authors: | Bihan, Herve Le ; Sahuc, Jean-Guillaume |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 9.2002, 9, p. 553-556
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Publisher: |
Taylor & Francis Journals |
Saved in:
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