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Discussion of 'A Snapshot of Inflation Targeting in its Adolescence'

Williams, John C - Reserve Bank of Australia

Persistent link: https://www.econbiz.de/10005398599

Assessing the Lucas critique in monetary policy models

Rudebusch, Glenn D. - Federal Reserve Bank of San Francisco - 2002

Empirical estimates of monetary policy rules suggest that the behavior of U.S. monetary policymakers changed during the past few decades. However, at the same time, statistical analyses of lagged representations of the economy, such as VARs, often have not rejected the null of structural...

Persistent link: https://www.econbiz.de/10005401535

Forward-looking behavior and optimal discretionary monetary policy

Lansing, Kevin J.; Trehan, Bharat - Federal Reserve Bank of San Francisco - 2003

serves to attenuate the response to inflation and the output gap in the optimal interest rate rule. In contrast, a more … curve serves to attenuate the response to inflation but magnifies the response to the output gap. ; Original title: Forward …

Persistent link: https://www.econbiz.de/10005401545

The policy preferences of the U.S. Federal Reserve

Dennis, Richard - Federal Reserve Bank of San Francisco - 2001

-Greenspan periods. Over the Volcker-Greenspan period we estimate the inflation target to be 2.0% and find that policymakers were willing …. In contrast, for the Burns-Miller period the inflation target is estimated to be 5.9%, and we find that policy makers …. Consequently, over this period policymakers tended to accommodate movements in inflation. We find statistical evidence that a …

Persistent link: https://www.econbiz.de/10005401550

Robust estimation and monetary policy with unobserved structural change

Williams, John C. - Federal Reserve Bank of San Francisco - 2004

This paper considers the monetary policymaker’s joint problem of model estimation and the design of a policy rule in the face of uncertainty regarding the process of structural change in the economy. Unobserved structural change is modeled through time variation in the natural rates of...

Persistent link: https://www.econbiz.de/10005401554

Monetary policy inertia: fact or fiction?

Rudebusch, Glenn D. - Federal Reserve Bank of San Francisco - 2005

Estimated monetary policy rules often appear to indicate a sluggish partial adjustment of the policy interest rate by the central bank. In fact, such evidence does not appear to be persuasive, since the illusion of monetary policy inertia may reflect spuriously omitted persistent influences on...

Persistent link: https://www.econbiz.de/10005401556

Optimal policy in rational-expectations models: new solution algorithms

Dennis, Richard - Federal Reserve Bank of San Francisco - 2001

This paper develops algorithms that solve for optimal discretionary and optimal pre-commitment policies in rational-expectations models. The techniques developed are simpler to apply than existing methods; they do not require identifying and separating predetermined variables from jump...

Persistent link: https://www.econbiz.de/10005401560

How important is precommitment for monetary policy?

Dennis, Richard; Soderstrom, Ulf - Federal Reserve Bank of San Francisco - 2002

can precommit, even in the absence of the traditional "inflation bias." This paper quantifies the welfare differential …-consistent models. From the precommitment and discretionary solutions we calculate the permanent deviation of inflation from target that … in welfare terms is equivalent to moving from discretion to precommitment, the "inflation equivalent." In the estimated …

Persistent link: https://www.econbiz.de/10005401564

Steps toward identifying central bank policy preferences

Dennis, Richard - Federal Reserve Bank of San Francisco - 2000

This paper takes the parameters in central bank loss functions as fundamental preferences to be estimated from the data. It is these preferences (along with target values) that define the policy regime in operation and that potentially change with senior central bank appointments. Optimizing...

Persistent link: https://www.econbiz.de/10005401586

Expectations, traps and discretion

Chari, V.V.; Christiano, Lawrence J.; Eichenbaum, Martin - Federal Reserve Bank of San Francisco - 1996

We argue that discretionary monetary policy exposes the economy to welfare-decreasing instability. It does so by creating the potential for private expectations about the response of monetary policy to exogenous shocks to be self-fulfilling. Among the many equilibria that are possible, some have...

Persistent link: https://www.econbiz.de/10005401592