The Macroeconomic Loss Function: A Critical Note

Thomas Mayer

No 771, CESifo Working Paper Series from CESifo

Abstract: The standard loss function counts both positive and negative deviations from the output and inflation targets as losses. But if the sample period is long enough, then output growth in excess of the target, and often also inflation rates that are below target, should be counted as gains instead of losses.

Keywords: loss functions; policy evaluation (search for similar items in EconPapers)
JEL-codes: E37 E50 E61 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The macroeconomic Loss Function: a Critical Note (2003)
Working Paper: The Macroeconomic Loss Function: A Critical Note (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_771

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