Explicit instrument versus targeting rules in the backward-looking model

Richard T. Froyen and Alfred Guender

Economics Letters, 2010, vol. 106, issue 1, 64-66

Abstract: In the backward-looking model, an explicit instrument rule is almost as efficient as a target rule. An explicit instrument rule leads to a more stable real rate of interest and hence an output stabilization bias compared to the target rule.

Keywords: Optimal; monetary; policy; Target; rule; Explicit; instrument; rule; Stabilization; bias; Interest; rate; volatility (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:106:y:2010:i:1:p:64-66

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