Konferenzbeitrag
Taylor rule cross-checking and selective monetary policy adjustment
The Taylor rule is a widely used concept in monetary macroeconomics and has been used in various areas either for positive or normative analyses. We examine whether the robustifying nature of Taylor rule cross-checking in the spirit of R island and Sveen (2011) also carries over to the case of parameter uncertainty. We find that adjusting monetary policy based on this kind of cross-checking can on average improve the outcome for the monetary authority in selected specifications. This, however, strongly depends on the functional form and also on the degree of the parameter misspecification as well as the information set of the monetary authority. In those specifications, increasing the relative weight attached to Taylor rule cross-checking results in a trade-off as higher average gains in terms of a reduction of loss are accompanied by higher standard deviations of the relative losses.
- Language
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Englisch
- Bibliographic citation
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Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2012: Neue Wege und Herausforderungen für den Arbeitsmarkt des 21. Jahrhunderts - Session: Monetary Policy and Financial Markets ; No. E14-V1
- Classification
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Wirtschaft
Monetary Policy
Money and Interest Rates: Forecasting and Simulation: Models and Applications
Central Banks and Their Policies
- Event
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Geistige Schöpfung
- (who)
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Roth, Markus
Bursian, Dirk
- Event
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Veröffentlichung
- (when)
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2012
- Handle
- Last update
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10.03.2025, 11:42 AM CET
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
- Konferenzbeitrag
Associated
- Roth, Markus
- Bursian, Dirk
Time of origin
- 2012
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