Arbeitspapier
Should central banks be more aggressive?
Simple models of monetary policy often imply optimal policy behavior that is considerably more aggressive than what is commonly observed. This paper argues that such counterfactual implications are due to model restrictions and a failure to account for multiplicative parameter uncertainty, rather than to policymakers being too cautious in their implementation of policy. Comparing a restricted and an unrestricted version of the same empirical model, the unrestricted version leads to less volatility in optimal policy, and, taking parameter uncertainty into account, to policy paths very close to actual Federal Reserve policy.
- Language
-
Englisch
- Bibliographic citation
-
Series: Sveriges Riksbank Working Paper Series ; No. 84
- Classification
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Subject
-
Optimal monetary policy
parameter uncertainty
interest rate smoothing
- Event
-
Geistige Schöpfung
- (who)
-
Söderström, Ulf
- Event
-
Veröffentlichung
- (who)
-
Sveriges Riksbank
- (where)
-
Stockholm
- (when)
-
1999
- Handle
- Last update
-
10.03.2025, 11:43 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
- Söderström, Ulf
- Sveriges Riksbank
Time of origin
- 1999
Other Objects (12)
Schweden, 1 Krone
Schweden, 1 Krone
Geldschein, 1 Krona, 1874
Geldschein, 1 Krona, 1914
Nominal GDP targeting and the zero lower bound: Should we abandon inflation targeting?
Should we use linearized models to calculate fiscal multipliers?
The monetary policy decision-making process and the term structure of interest rates
Testing for the Lucas Critique: A Quantitative Investigation
How important are financial frictions in the US and the Euro area
Business cycle implications of mortgage spreads
Output gaps and robust monetary policy rules
Is the Short-run Phillips Curve Nonlinear? Empirical Evidence for Australia, Sweden and the United States
Schweden, 1 Krone
Schweden, 1 Krone
Geldschein, 1 Krona, 1874
Geldschein, 1 Krona, 1914
Nominal GDP targeting and the zero lower bound: Should we abandon inflation targeting?
Should we use linearized models to calculate fiscal multipliers?
The monetary policy decision-making process and the term structure of interest rates
Testing for the Lucas Critique: A Quantitative Investigation
How important are financial frictions in the US and the Euro area
Business cycle implications of mortgage spreads
Output gaps and robust monetary policy rules
Is the Short-run Phillips Curve Nonlinear? Empirical Evidence for Australia, Sweden and the United States
Schweden, 1 Krone
Schweden, 1 Krone
Geldschein, 1 Krona, 1874
Geldschein, 1 Krona, 1914
Nominal GDP targeting and the zero lower bound: Should we abandon inflation targeting?
Should we use linearized models to calculate fiscal multipliers?
The monetary policy decision-making process and the term structure of interest rates
Testing for the Lucas Critique: A Quantitative Investigation
How important are financial frictions in the US and the Euro area
Business cycle implications of mortgage spreads
Output gaps and robust monetary policy rules