Time-varying equilibrium real rates and monetary policy analysis
被引:24
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作者:
Trehan, Bharat
论文数: 0引用数: 0
h-index: 0
机构:Fed Reserve Bank Dallas, Econ Res, Dallas, TX 75206 USA
Trehan, Bharat
Wu, Tao
论文数: 0引用数: 0
h-index: 0
机构:Fed Reserve Bank Dallas, Econ Res, Dallas, TX 75206 USA
Wu, Tao
机构:
[1] Fed Reserve Bank Dallas, Econ Res, Dallas, TX 75206 USA
[2] Fed Reserve Bank San Francisco, Econ Res, San Francisco, CA 94105 USA
来源:
JOURNAL OF ECONOMIC DYNAMICS & CONTROL
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2007年
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31卷
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05期
关键词:
monetary policy rules;
D O I:
10.1016/j.jedc.2006.04.009
中图分类号:
F [经济];
学科分类号:
02 ;
摘要:
We show how a positive correlation between the equilibrium real interest rate (ERR) and trend growth matters for two widely debated issues in monetary policy. First, a simple Taylor rule is more robust to uncertainty about the trend growth rate than suggested by some analyses of the increase in U.S. inflation during the 1970s, because the policy mistake made when measuring the change in trend growth gets offset by the accompanying mistake in measuring the change in the ERR. Second, ignoring this correlation when estimating policy rules results in coefficients that exaggerate both the degree of interest rate smoothing and the strength of the monetary authority's response to inflation. (C) 2006 Elsevier B.V. All rights reserved.
机构:
Sam Houston State Univ, Dept Econ & Int Business, Huntsville, TX 77382 USASam Houston State Univ, Dept Econ & Int Business, Huntsville, TX 77382 USA
Gonzalez, Fidel
Rodriguez, Arnulfo
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机构:
Banamex, Dept Econ Res, Mexico City 01210, DF, MexicoSam Houston State Univ, Dept Econ & Int Business, Huntsville, TX 77382 USA