Simple versus optimal rules as guides to policy

• 成果类型: Article; Proceedings Paper
• 署名作者: Brock, William A.; Durlauf, Steven N.; Nason, James M.; Rondina, Giacomo
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Federal Reserve System - USA; Federal Reserve Bank - Atlanta; University of California System; University of California San Diego
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2007.06.008
• 发表日期: 2007
• 页码: 1372-1396
• 关键词: Policy evaluation; model uncertainty; design limits; Monetary policy rules

摘要

This paper compares the performance of different policy rules. Our comparisons focus on simple feedback rules versus rules which are optimal, given knowledge of the correct economic structure and the appropriate loss function for the policymaker. First, we compare rule performance when the correct model is not known. Second, we compare rule performance with respect to the frequency-specific behavior for variables of interest. Taken as a whole, our results indicate how the case for a model-specific optimal rule can break down when one relaxes the assumption that the true model is known as well as the assumption that the appropriate loss function is known. Links are made to the literature on monetary policy. (c) 2007 Elsevier B.V. All rights reserved.