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http://hdl.handle.net/10419/56919
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| Title: | | Which parameters drive approximation inaccuracies?  |
| Authors: | | Sienknecht, Sebastian |
| Issue Date: | | 2010 |
| Series/Report no.: | | Jena economic research papers 2010,093 |
| Abstract: | | This paper identifies parameters responsible for welfare reversals when the basic New Keynesian model is approximated. In our setting, a reversal occurs when the Ramsey policy under timeless perspective commitment ceases to be dominant against the Taylor rule after approximating the model. We find that the parameters involved are the degree of persistence in the autoregressive shock process and the labor elasticity of real output. |
| Subjects: | | optimal monetary policy approximations welfare analysis timeless perspective |
| JEL: | | E30 E52 E61 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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