Evaluating alternative monetary policy rules

An Encompassing Framework for Evaluating Simple Monetary Policy Rules:

Taylor and others have argued that model stability requires interest rate policy rules have an inflation feedback parameter greater than one. In this paper we build an encompassing framework to analyse the stability conditions of various policy rules on Taylor’s model and in a world where there are nominal rigidities in the short-term evolution of demand. We conclude that with a combined nomina...

evaluating and comparing of monetary policy instrumental rules for economic of iran

today, the discussion of regularity monetary policy in achieving inflation and output gap stabilization is important. in this paper, we investigated the persistence of the output gap in iran economy and then by using a hybrid new keynesian model based on quarterly data for 1990:1- 2011:3. we compared three alternative instrumental rules in monetary policy for iran economy. the results indicated...

Learning, monetary policy rules, and macroeconomic stability

Several papers have documented a regime switch in US monetary policy from ‘passive’ and destabilizing in the pre-1979 period to ‘active’ and stabilizing afterwards. These studies typically work with DSGE models with rational expectations. This paper relaxes the assumption of rational expectations and allows for learning instead. Economic agents form expectations from simple models and update th...

Forecasting monetary policy rules in South Africa

This paper is the first one to: (i) provide in-sample estimates of linear and nonlinear Taylor rules, augmented with an indicator of financial stability, for the case of South Africa, and (ii) analyse the ability of linear and nonlinear monetary policy rule specifications, as well as nonparametric and semiparametric models, to forecast the nominal interest rate setting that describes the South ...

Introductory Remarks on Monetary Policy Rules