Real-time expectations in the Taylor rule
نویسنده
چکیده
This paper presents a refined interpretation of the role of real time data in estimating a Taylor rule. We use monthly Consensus survey data to construct inflationary and growth expectations. We argue that using real time expectations in estimating a Taylor rule is to be preferred above using real time output gap data alone. We approach uncertainty by the variance and skewness of expected output growth. Our empirical application focuses on Germany from 1990 to 1998. We find evidence that inflationary skewness mattered in German monetary policy.
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