Assessing the Welfare Cost of a Fixed Exchange-Rate Policy

Arbeitspapier

This paper performs a welfare analysis based on the hypothetical scenario that Denmark gave up its peg and started conducting monetary policy according to a Taylor rule. For this we rely on a dynamic stochastic general equilibrium model for a small open economy that was estimated on Danish data using Bayesian methods. We obtain the result that the gain in welfare is equivalent to a permanent increase of around 0.8 pct in the level of consumption. Examining a range of alternative scenarios does not change this conclusion, unless we assume a degree of policy errors under the Taylor rule that is substantially larger than those estimated by other studies.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: EPRU Working Paper Series ; No. 2005-04

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: open economy ; monetary policy ; business cycles ; welfare ; Fester Wechselkurs ; Wechselkurspolitik ; Geldpolitik ; Taylor-Regel ; Allgemeines Gleichgewicht ; Kleine offene Volkswirtschaft ; Konjunktur ; Dänemark

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Dam, Niels Arne ; Gregers Linaa, Jesper
• Ereignis: Veröffentlichung
• (wer): University of Copenhagen, Economic Policy Research Unit (EPRU)
• (wo): Copenhagen
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/82013
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ