Optimal monetary policy with asymmetric preferences for output

Steven Cassou (), C. Scott and Jesús Vázquez

Economics Letters, 2012, vol. 117, issue 3, 654-656

Abstract: We extend Ruge-Murcia (2003, 2004) to weigh inflation and output and show that empirical evidence supports an asymmetric preference hypothesis for output. We also find evidence that the monetary authority targets potential output in parallel to Barro and Gordon (1983).

Keywords: Optimal monetary policy; Asymmetric preferences; Conditional output volatility (search for similar items in EconPapers)
JEL-codes: E31 E52 E61 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:3:p:654-656

DOI: 10.1016/j.econlet.2012.08.009

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