Theoretical Conditions under Which Monetary Policies Are Effective and Practical Obstacles to Their Verification

Theoretical Conditions under Which Monetary Policies Are Effective and Practical Obstacles to Their Verification

We derive (i) necessary and sufficient and (ii) sufficient conditions for monetary policies to conform to what the literature characterizes as good policies. We show that the biasing effects of omitted variables, measurement errors, and misspecifications of "true" functional forms on the c...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Economic theory 2005-06, Vol.25 (4), p.999-1005
Hauptverfasser: Swamy, P. A. V. B., Tavlas, George S.
Format: Artikel
Sprache:eng
Schlagworte:
Coefficients
Discourse
Economic efficiency
Economic theory
Error rates
Evaluation
Exposita Notes
Federal Reserve Bank
Inflation rates
Interest rates
Monetary policy
Monetary policy rule
Monetary theory
Policy making
Studies
Sufficient conditions
Variable coefficients
Variables
Zero
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
Beschreibung
Zusammenfassung:We derive (i) necessary and sufficient and (ii) sufficient conditions for monetary policies to conform to what the literature characterizes as good policies. We show that the biasing effects of omitted variables, measurement errors, and misspecifications of "true" functional forms on the coefficients of monetary-policy reaction functions present practical obstacles to verifying such conditions.
ISSN:0938-2259
1432-0479
DOI:10.1007/s00199-004-0482-8