Arbeitspapier
Parameter misspecification and robust monetary policy rules
In this paper, I evaluate the performance deterioration that occurs when the central bank employs an optimal targeting rule that is based on incorrect parameter values. I focus on two parameters — the degree of inflation inertia and the degree of price stickiness. I explicitly account for the effects of the structural parameters on the objective function used to evaluate outcomes, as well as on the model’s behavioral equations. The costs of using simple rules relative to the costs of parameter misspecification are also assessed.
- Language
-
Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 477
- Classification
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Subject
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Misspecification
monetary policy
Robustness
Geldpolitik
Regelbindung versus Diskretion
Neoklassische Synthese
Robustes Verfahren
Modellierung
- Event
-
Geistige Schöpfung
- (who)
-
Walsh, Carl E.
- Event
-
Veröffentlichung
- (who)
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European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2005
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Walsh, Carl E.
- European Central Bank (ECB)
Time of origin
- 2005
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