The Macroeconomic Loss Function: A Critical Note

Arbeitspapier

The standard loss function counts both positive and negative deviations from the output and inflation targets as losses. But if the sample period is long enough, then output growth in excess of the target, and often also inflation rates that are below target, should be counted as gains instead of losses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 771

Classification and Topics

• Classification: Wirtschaft ; Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Policy Objectives; Policy Designs and Consistency; Policy Coordination
• Subject: loss functions ; policy evaluation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mayer, Thomas
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/75949
• Last update: 10.03.2025, 11:43 AM CET