Robust European Monetary Policy Rules

Jean-Guillaume Sahuc

No 03-06, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: This note applies H∞ methods to an estimated hybrid monetary policy model (cf. Sahuc, Applied Economics Letters, 9, pp. 949-55, 2002) and derives standard and robust optimal interest rate rules. We find that the "robust" central banker responds more aggressively than it does without concerns for robustness and that the responses of the state variables in this case are not necessarily always stronger than the standard ones.

Keywords: Euro area; robustness; uncertainty; optimal monetary policy (search for similar items in EconPapers)
JEL-codes: C32 E17 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2003
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Citations: View citations in EconPapers (1)

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