Arbeitspapier
When Does an Interest Rate Path "Look Good"? Criteria for an Appropriate Future Interest Rate Path
Svensson (2004) suggested that a monetary policy committee of a central bank (MPC) should "find an instrument-rate path such that projections of inflation and output gap 'look good'." Academic literature on monetary policy gives guidance as to what the words "look good" means. However, there is a need for a translation of the theoretical framework into concrete criteria when an MPC shall evaluate interest rate paths in practice. Six criteria for an appropriate interest rate path are presented. In the November 2005 Inflation Report, Norges Bank presented for the first time an optimal interest rate path including a fan chart illustrating the uncertainty of the forecast using these criteria. Examples used in explaining the criteria are drawn from Norwegian experiences.
- ISBN
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82-7553-355-4
- Language
-
Englisch
- Bibliographic citation
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Series: Working Paper ; No. 2006/5
- Classification
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Wirtschaft
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
Monetary Policy
Central Banks and Their Policies
- Subject
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forecasts
flexible inflation targeting
optimal monetary policy
- Event
-
Geistige Schöpfung
- (who)
-
Qvigstad, Jan F.
- Event
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Veröffentlichung
- (who)
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Norges Bank
- (where)
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Oslo
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:43 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
- Arbeitspapier
Associated
- Qvigstad, Jan F.
- Norges Bank
Time of origin
- 2006
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Models for Interest Rates and Interest Rate Derivatives
Interest rate management
Forecasting interest rates
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How much do financial analysts disagree on the future path of the ECB’s interest rate?
Does the Chinese interest rate follow the US interest rate?
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Backward-Looking Interest-Rate Rules, Interest-Rate Smoothing,and Macroeconomic Instability
Chaotic interest rate rules
When Does an Interest Rate Path "Look Good"? Criteria for an Appropriate Future Interest Rate Path - a Practician's Approach
Norges Bank's Endogenous Interest Rate Path and Its Impact on Interest Rate Expectations
Models for Interest Rates and Interest Rate Derivatives
Interest rate management
Forecasting interest rates
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How much do financial analysts disagree on the future path of the ECB’s interest rate?
Does the Chinese interest rate follow the US interest rate?
How Stale Central Bank Interest Rate Projections Affect Interest Rate Uncertainty
Backward-Looking Interest-Rate Rules, Interest-Rate Smoothing,and Macroeconomic Instability