A primer on optimal policy projections

Thomas Dengler, Rafael Gerke, Sebastian Giesen, Daniel Kienzler, Joost Röttger, Alexander Scheer and Johannes Wacks

No 01/2024, Technical Papers from Deutsche Bundesbank

Abstract: Optimal policy projections (OPPs) offer a flexible way to derive scenario-based policy recommendations. This note describes how to calculate OPPs for a simple textbook New Keynesian model and provides illustrations for various examples. It also demonstrates the versatility of the approach by showing OPP results for simulations conducted using a medium-scale DSGE model and a New Keynesian model with heterogeneous households.

Keywords: Optimal monetary policy; macroeconomic projections; New Keynesian models; household heterogeneity (search for similar items in EconPapers)
JEL-codes: C63 E20 E31 E47 E52 E58 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-dcm and nep-dge
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubtps:285379

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