Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323606 
Year of Publication: 
2019
Citation: 
[Journal:] International Review of Economics & Finance [ISSN:] 1873-8036 [Volume:] 61 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2019 [Pages:] 289-303
Publisher: 
Elsevier, Amsterdam
Abstract: 
Central banks' monetary policy rules being consistent with policy objectives are a fundamental of applied monetary economics. We seek to determine, first, which of the central bank's rules are most in line with the historical data for the US economy and, second, what policy rule would work best to assist the central bank in reaching its objectives via several loss function measures. We use Bayesian estimations to evaluate twelve monetary policy rules from 1955 to 2017 and over three different sub-periods. We find that when considering the central bank's loss functions, the estimates often indicate the superiority of NGDP level targeting rules, though Taylor-type rules lead to nearly identical implications. However, the results suggest that various central bank empirical rules, be they NGDP or Taylor type, are more appropriate to achieve the central bank's objectives for each type of period (stable, crisis, recovery).
Subjects: 
Monetary policy
Monetary rule
Central bank loss
Central banking
Federal Reserve
DSGE models
JEL: 
E52
E58
E32
C11
C61
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
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