Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152911
Authors: 
Walsh, Carl E.
Year of Publication: 
2005
Series/Report no.: 
ECB Working Paper 477
Abstract: 
In this paper, I evaluate the performance deterioration that occurs when the central bank employs an optimal targeting rule that is based on incorrect parameter values. I focus on two parameters — the degree of inflation inertia and the degree of price stickiness. I explicitly account for the effects of the structural parameters on the objective function used to evaluate outcomes, as well as on the model’s behavioral equations. The costs of using simple rules relative to the costs of parameter misspecification are also assessed.
Subjects: 
Misspecification
monetary policy
Robustness
JEL: 
E52
E58
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.