OPTIMAL MONETARY POLICY IN A MODEL WITH HABIT FORMATION

Jeffrey Fuhrer

No 306, Computing in Economics and Finance 2000 from Society for Computational Economics

Abstract: A number of recent papers have explored monetary policy options, including inflation targeting and inflation forecast targeting (notably Svensson (1998, 1999, 2000)) and price level targeting (Wolman 1999, Batini and Yates 1999, Blinder 1999). Most papers explore ``optimal'' monetary policy in the context of a single model. However, a number of conclusions made in the literature depend strongly on the model specification used. In addition, most papers have used the efficient policy frontier concept to define optimal monetary policy. This paper investigates the behavior of a variety of small structural macro models under a variety of targeting rules. The paper examines both minimum variance policy frontiers and utility-maximizing policy. In the latter case, an explicit model of consumer behavior with inflation-induced tax distortions is explored.

Date: 2000-07-05
References: Add references at CitEc
Citations: View citations in EconPapers (27)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Optimal monetary policy in a model with habit formation (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:sce:scecf0:306

Access Statistics for this paper

More papers in Computing in Economics and Finance 2000 from Society for Computational Economics CEF 2000, Departament d'Economia i Empresa, Universitat Pompeu Fabra, Ramon Trias Fargas, 25,27, 08005, Barcelona, Spain. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().