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Inflation Targeting with NAIRU Uncertainty and Endogenous Policy Credibility

Stochastic simulations are employed to compare performance of monetary policy rules in linear and nonlinear variants of a small macro model with NAIRU uncertainity under different assumptions about the way inflation expectations are formed. Cases in which policy credibility is ignored or treated as...

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Bibliographic Details
Main Author: Isard, Peter
Other Authors: Eliasson, Ann-Charlotte, Laxton, Douglas
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2001
Series:IMF Working Papers
Subjects:
Interest Rates
Inflation
Finance
Labour
Monetary Economics
Inflation Targeting
Financial Services
Real Interest Rates
Deflation
Unemployment: Models, Duration, Incidence, And Job Search
Unemployment
Labor
Model Construction And Estimation
Price Level
Banks And Banking
Prices
Macroeconomics
Monetary Policy
Interest Rates: Determination, Term Structure, And Effects
Unemployment Rate
Money And Monetary Policy
Income Economics
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:Stochastic simulations are employed to compare performance of monetary policy rules in linear and nonlinear variants of a small macro model with NAIRU uncertainity under different assumptions about the way inflation expectations are formed. Cases in which policy credibility is ignored or treated as exogenous are distinguished from cases in which credibility and inflation expectations respond endogenuously policy credibility strengthens the case for forward-looking inflation forecast based rules relative to backward-looking Taylor rules
Physical Description:41 pages
ISBN:9781451842418

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