Nonlinear Monetary Policy Rules: Some New Evidence for the U.S

Juan Dolado, Ramón Maria-Dolores and Francisco Ruge-Murcia

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

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 nonlinear. Analytical results show that these features lead to sign and size asymmetries, and nonlinearities in the policy rule. Reduced-form estimates indicate that US monetary policy can be characterized by a nonlinear 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: nonlinear Taylor rules; inflation targets; asymmetric eferences; non- linear Philli curve; monetary licy (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2003
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://hdl.handle.net/1866/513 (application/pdf)

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: Non-Linear Monetary Policy Rules: Some New Evidence for the US (2002)
Working Paper: Nonlinear monetary policy rules: some new evidence for the US (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2003-24

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