EconPapers    
Economics at your fingertips  
 

Testing the Opportunistic Approach to Monetary Policy

Christopher Martin and Costas Milas

MPRA Paper from University Library of Munich, Germany

Abstract: The Opportunistic Approach to Monetary Policy is an influential but untested model of optimal monetary policy. We provide the first tests of the model, using US data from 1983Q1-2004Q1. Our results support the Opportunistic Approach. We find that policymakers respond to the gap between inflation and an intermediate target that reflects the recent history of inflation. We find that there is no response of interest rates to inflation when inflation is within 1% of the intermediate target but a strong response when inflation is further from the intermediate target.

JEL-codes: E52 (search for similar items in EconPapers)
Date: 2006-10-24
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 (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/849/1/MPRA_paper_849.pdf original version (application/pdf)

Related works:
Journal Article: TESTING THE OPPORTUNISTIC APPROACH TO MONETARY POLICY (2010) Downloads
Working Paper: Testing the Opportunistic Approach to Monetary Policy (2007) Downloads
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:pra:mprapa:849

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2025-03-22
Handle: RePEc:pra:mprapa:849