Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148890
Authors: 
Almosova, Anna
Year of Publication: 
2016
Series/Report no.: 
SFB 649 Discussion Paper 2016-054
Abstract: 
This paper estimates a New Keynesian DSGE model with search frictions and monetary rules augmented with different labor market indicators. In accordance with a theoretical literature I find that a central bank reacts to a labor market tightness, employment or unemployment. Posterior odds tests speak in favor of models with augmented Taylor rules versus a model with a model with a standard rule. The augmented rules were also shown to be more efficient in terms of welfare.
Subjects: 
Search frictions
Optimal monetary policy
Bayesian estimation
Taylor rules
JEL: 
E52
E24
C11
Document Type: 
Working Paper

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