GDP Data Revisions and Forward-Looking Monetary Policy in Switzerland
Thomas J. Jordan,
Peter Kugler (),
Carlos Lenz and
Marcel Savioz ()
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Peter Kugler: University of Basel
Working papers from Faculty of Business and Economics - University of Basel
This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR model consisting of four variables taking into account data revisions for GDP. First, the paper develops an analytical method to analyze the effect of data revision errors in GDP on the ex ante or conditional inflation-output-growth volatility trade-off and applies it to Swiss data. Second, the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. In general, the results obtained suggest that focusing monetary policy on GDP growth instead on inflation may lead to an inefficient policy with both increased medium term inflation and GDP growth volatility in the presence of GDP data revisions.
Keywords: Structural VAR; forward-looking monetary policy; efficiency frontier; GDP data revisions (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
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Journal Article: GDP data revisions and forward-looking monetary policy in Switzerland (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2005/05
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