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Robust versus Optimal Rules in Monetary Policy: A Note

Maria Demertzis and Alexander Tieman

WO Research Memoranda (discontinued) from Netherlands Central Bank, Research Department

Abstract: We provide a framework for analysing the choice between optimal and robust rules in the presence of paradigm uncertainty in monetary policy. We thus provide two issues: first, we discuss the conditions of uncertainty that render a robust rule a preferable substitute to optimal rules and second, we show how the degree of risk aversion increases the desirability of robust rules.

Keywords: Model Uncertainty; Monetaru Policy; Optimal Policy Rules (search for similar items in EconPapers)
JEL-codes: E52 E58 C70 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon
Date: 2002
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Related works:
Working Paper: Robust Versus Optimal Rules in Monetary Policy; A Note (2004) Downloads
Working Paper: Robust versus Optimal Rules in Monetary Policy: A note (2003) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:dnb:wormem:701

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