Juillard, Michel; Karam, Philippe; Laxton, Douglas; … - 2006
We develop and estimate a stylized micro-founded model of the US economy. Next we compute the parameters of a simple … interest rate policy rule that maximizes the unconditional mean of utility. We show that such a welfare-based rule lies close … to the Taylor efficiency frontier. A counterfactual analysis assesses to what extent using such a rule as a guideline for …