Monetary Policy Analysis in Backward-Looking Models

Jesper Lindé

No 114, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: In this paper, I investigate quantitatively how sensitive a typical backward-looking model used in monetary plicy analysis is to the Lucas critique. To do this, I use an equilibrium business cycle model with a Taylor-type rule for nominal money growth. The backward-looking model displays considerable parameter instability, both from a statistical and economic point of view, when the parameters in the estimated monetary policy ruel change. THe findings suggest that the robustness of the conclusions in the literature on the relative merits of an alternative monetary policy rules should be checked in an equilibrium framework.

Keywords: Lucas critique; Real business cycle model; Taylor rules; Aggregate supply; Aggregate demand (search for similar items in EconPapers)
JEL-codes: C22 C52 E41 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2000-11-01
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming in Annales d'Economie et de Statistique.

Downloads: (external link)
http://www.riksbank.com/upload/4589/WP_114.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.riksbank.com/upload/4589/WP_114.pdf [301 Moved Permanently]--> https://www.riksbank.se/en-gb/upload/4589/WP_114.pdf [301 Moved Permanently]--> http://archive.riksbank.se/Upload/4589/WP_114.pdf)

Related works:
Journal Article: Monetary Policy Analysis in Backward-Looking Models (2002)
Working Paper: Monetary Policy Analysis in Backward-Looking Models (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0114

Access Statistics for this paper

More papers in Working Paper Series from Sveriges Riksbank (Central Bank of Sweden) Sveriges Riksbank, SE-103 37 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Lena Löfgren ().