Showing 1 - 7 of 7
This paper explores Knightian model uncertainty as a possible explanation of the considerable difference between estimated interest rate rules and optimal feedback descriptions of monetary policy. We focus on two types of uncertainty: (i) unstructured model uncertainty reflected in additive...
Persistent link: https://www.econbiz.de/10005721248
in the real-time, real-world environment seen by the Fed staff. However, I do identify certain policy rules that would …
Persistent link: https://www.econbiz.de/10008498930
their implied judgments of the state of the world in 1997 and our OPPs illustrate this difference. For a conventional loss …
Persistent link: https://www.econbiz.de/10005393762
We study 30 vintages of FRB/US, the principal macro model used by the Federal Reserve Board staff for forecasting and policy analysis. To do this, we exploit archives of the model code, coefficients, baseline databases and stochastic shock sets stored after each FOMC meeting from the model's...
Persistent link: https://www.econbiz.de/10005393838
The monetary policy rules that are widely discussed--notably the Taylor rule--are remarkable for their simplicity. One reason for the apparent preference for simple ad hoc rules over optimal rules might be the assumption of full information maintained in the computation of an optimal rule....
Persistent link: https://www.econbiz.de/10005393895
Monetary policy is modeled as governed by a known rule, except for a time-varying target rate of inflation. The variable target is taken as representing either discretionary deviations from the rule, or as the outcome of a policymaking committee that is unable to arrive at a consensus....
Persistent link: https://www.econbiz.de/10005393925
In recent years, the learnability of rational expectations equilibria (REE) and determinacy of economic structures have rightfully joined the usual performance criteria among the sought-after goals of policy design. Some contributions to the literature, including Bullard and Mitra (2001) and...
Persistent link: https://www.econbiz.de/10005512992