Robust Versus Optimal Rules in Monetary Policy : A Note.

We provide a framework for analyzing the choice between optimal and robust monetary policy rules in the presence of paradigm uncertainty. We first discuss the conditions on uncertainty that render a robust rule preferable to an optimal rule. Second, we show how the degree of risk aversion of the pol...

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Bibliografski detalji
Autor kompanije: International Monetary Fund
Format: Žurnal
Jezik:English
Izdano: Washington, D.C. : International Monetary Fund, 2004.
Serija:IMF Working Papers; Working Paper ; No. 2004/096
Teme:
Online pristup:Full text available on IMF
Opis
Sažetak:We provide a framework for analyzing the choice between optimal and robust monetary policy rules in the presence of paradigm uncertainty. We first discuss the conditions on uncertainty that render a robust rule preferable to an optimal rule. Second, we show how the degree of risk aversion of the policymaker increases the region in which the robust rule is preferred.
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Opis:1 online resource (10 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Pristup:Electronic access restricted to authorized BRAC University faculty, staff and students