Estimates of the Effectiveness of Monetary Policy

Ray Fair ()

No 1298, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: This paper examines various interest rate rules, as well as policies derived by solving optimal control problems, for their ability to dampen economic fluctuations caused by random shocks. A tax rate rule is also considered. A multicountry econometric model is used for the experiments. The results differ sharply from those obtained using recent models in which the coefficient on inflation in the nominal interest rate rule must be greater than one in order for the economy to be stable.

Keywords: Monetary policy; interest rate rules (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2001-04, Revised 2003-06
Note: CFP 1155
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Published in Journal of Money, Credit and Banking (August 2005), 645-660

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Related works:
Working Paper: Estimates of the Effectiveness of Monetary Policy (2001)
Journal Article: Estimates of the Effectiveness of Monetary Policy (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:1298

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