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Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank >
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http://hdl.handle.net/10419/19498
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| Title: | | Measurement errors in GDP and forward-looking monetary policy: The Swiss case  |
| Authors: | | Kugler, Peter Jordan, Thomas J. Lenz, Carlos Savioz, Marcel R. |
| Issue Date: | | 2004 |
| Series/Report no.: | | Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2004,31 |
| Abstract: | | This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR consisting of four variables. First, the paper looks at the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination of a strict inflation and output growth targeting rule implied by this SVAR model. Thereby the paper introduces a new analytical method. Second, the paper considers the effect of measurement errors in GDP on this inflation-output-growth volatility trade-off. Third, the paper works at the impact of changing beliefs about the potential growth rate on the variability of output growth and inflation. Finally the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. |
| Subjects: | | Structural VAR forward-looking monetary policy efficiency frontier GDP measurement errors |
| JEL: | | E53 E52 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank
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