Artikel
Evaluating Inflation Targeting Using a Macroeconometric Model
This paper uses a structurally estimated macroeconometric model, denoted the MC model, to evaluate inflation targeting in the United States. Various interest rate rules are tried with differing weights on inflation and output, and various optimal control problems are solved using differing weights on inflation and output targets. Price-level targeting is also considered. The results show that 1) there are output costs to inflation targeting, especially for price shocks, 2) price-level targeting is dominated by inflation targeting, 3) the estimated interest rate rule of the Fed (in Table 4) is consistent with the Fed placing equal weights on inflation and unemployment in a loss function, 4) the estimated interest rate rule does a fairly good job at lowering variability, and 5) considerable economic variability is left after the Fed has done its best. Overall, the results suggest that the Fed should continue to behave as it has in the past.
- Sprache
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Englisch
- Erschienen in
-
Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 1 ; Year: 2007 ; Issue: 2007-8 ; Pages: 1-52 ; Kiel: Kiel Institute for the World Economy (IfW)
- Klassifikation
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Wirtschaft
Monetary Policy
- Thema
-
inflation targeting
interest rate rules
optimal control
Inflation Targeting
Ökonometrisches Makromodell
Ungleichgewichtstheorie
Theorie
USA
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fair, Ray C.
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel Institute for the World Economy (IfW)
- (wo)
-
Kiel
- (wann)
-
2007
- DOI
-
doi:10.5018/economics-ejournal.ja.2007-8
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Artikel
Beteiligte
- Fair, Ray C.
- Kiel Institute for the World Economy (IfW)
Entstanden
- 2007
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