Arbeitspapier
Welfare-based monetary policy rules in an estimated DSGE model of the US economy
We develop and estimate a stylized micro-founded model of the US economy. Next we compute the parameters of a simple interest rate policy rule that maximizes the unconditional mean of utility. We show that such a welfare-based rule lies close to the Taylor efficiency frontier. A counterfactual analysis assesses to what extent using such a rule as a guideline for monetary policy would have helped to avoid the inflationary swings of the 1970s and reduce the severity of boom and bust cycles. The paper also provides estimates of the welfare implications of business cycle variability and discusses their relevance.
- Language
-
Englisch
- Bibliographic citation
-
Series: ECB Working Paper ; No. 613
- Classification
-
Wirtschaft
Model Construction and Estimation
Price Level; Inflation; Deflation
Monetary Policy
- Subject
-
competition
Markups
monetary policy
Taylor Rule
Geldpolitik
Taylor-Regel
Makroökonometrie
Wettbewerb
USA
- Event
-
Geistige Schöpfung
- (who)
-
Juillard, Michel
Karam, Philippe
Laxton, Douglas
Pesenti, Paolo
- Event
-
Veröffentlichung
- (who)
-
European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2006
- Handle
- Last update
-
10.03.2025, 11:45 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
- Juillard, Michel
- Karam, Philippe
- Laxton, Douglas
- Pesenti, Paolo
- European Central Bank (ECB)
Time of origin
- 2006
Other Objects (12)
Evaluating interest rate rules in an estimated DSGE model
Monetary and fiscal policy analyses in estimated DSGE models
Optimal simple monetary policy rules and welfare in a DSGE model for Hungary
Optimal monetary policy in an estimated DSGE for the euro area
Monetary policy trade-offs in an estimated open-economy DSGE model
Welfare Implications of Alternative Monetary Policy Rules: A New Keynesian DSGE Model for Turkey
Monetary and macroprudential policy in an estimated DSGE model of the Euro Area
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Estimated DSGE Model for Monetary and Fiscal Polic Coordination Analysis – The Case of Serbia
Evaluating interest rate rules in an estimated DSGE model
Monetary and fiscal policy analyses in estimated DSGE models
Optimal simple monetary policy rules and welfare in a DSGE model for Hungary
Optimal monetary policy in an estimated DSGE for the euro area
Monetary policy trade-offs in an estimated open-economy DSGE model
Welfare Implications of Alternative Monetary Policy Rules: A New Keynesian DSGE Model for Turkey
Monetary and macroprudential policy in an estimated DSGE model of the Euro Area
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Estimated DSGE Model for Monetary and Fiscal Polic Coordination Analysis – The Case of Serbia
Evaluating interest rate rules in an estimated DSGE model
Monetary and fiscal policy analyses in estimated DSGE models
Optimal simple monetary policy rules and welfare in a DSGE model for Hungary
Optimal monetary policy in an estimated DSGE for the euro area
Monetary policy trade-offs in an estimated open-economy DSGE model
Welfare Implications of Alternative Monetary Policy Rules: A New Keynesian DSGE Model for Turkey
Monetary and macroprudential policy in an estimated DSGE model of the Euro Area
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model
Identifying the role of labor markets for monetary policy in an estimated DSGE model