Non-Linear Monetary Policy Rules: Some New Evidence for the US

Juan Dolado, María-Dolores, Ramón and Francisco Ruge-Murcia
Authors registered in the RePEc Author Service: Ramón Maria-Dolores

No 3405, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper derives optimal monetary policy rules in setups where certainty equivalence does not hold because either central bank preferences are not quadratic, and/or the aggregate supply relation is non-linear. Analytical results show that these features lead to sign and size asymmetries, and non-linearities in the policy rule. Reduced-form estimates indicate that US monetary policy can be characterized by a non-linear policy rule after 1983, but not before 1979. This finding is consistent with the view that the Fed?s inflation preferences during the Volcker-Greenspan regime differ considerably from the ones during the Burns-Miller regime.

Keywords: Non-linear taylor rules; Inflation targets; Asymmetric preferences; Non-linear phillips curve; Monetary policy (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2002-06
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Related works:
Journal Article: Nonlinear Monetary Policy Rules: Some New Evidence for the U.S (2004)
Working Paper: Nonlinear Monetary Policy Rules: Some New Evidence for the U.S (2003)
Working Paper: Nonlinear Monetary Policy Rules: Some New Evidence for the U.S (2003)
Working Paper: Nonlinear monetary policy rules: some new evidence for the US (2002)
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