Many argue that, in the presence of a lower bound on nominal interest rates, central banks should use a risk management approach for setting policy, which implies commit- ting to a more expansionary policy to deal with uncertainty about the economic recovery. Using a standard model for monetary...

A small-scale open economy dynamic stochastic general equilibrium (DSGE) model is used to examine Philippine monetary policy. The model's parameters are estimated using Bayesian methods. Posterior odds tests are conducted to compare models with different specifications of the policy rule. These...