Title of article
When isdiscretionsuperiortotimelessperspectivepolicymaking
Author/Authors
Richard Dennis، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2010
Pages
12
From page
266
To page
277
Abstract
The monetarypolicyliteratureassumesincreasinglythatpolicyisformulatedaccording
to thetimelessperspective(Woodford,1999a). However,bytreatingappropriatelythe
auxiliarystatevariablesthatcharacterizethetimelessperspectiveequilibriumwhen
evaluatingpolicyperformance,thispapershowsthatdiscretionarypolicymakingcanbe
superiortotimelessperspectivepolicymakingandidentifiesmodelfeaturesthatmake
thisoutcomemorelikely.UsingstandardNewKeynesianDSGEmodels,discretionis
foundtodominatetimelessperspectivepolicymakingwhentheprice/wagePhillips
curvesarerelativelyflat,due,perhaps,tofirm-specificcapital(orlabor)and/or Kimball
(1995) aggregationincombinationwithnominalrigidities.Theseresultssuggestthat
studiesapplyingthetimelessperspectivemightalsousefullycompareitsperformance
to discretion,payingcarefulattentiontohowpolicyperformanceisevaluated
Keywords
DiscretionTimeless perspectivePolicy evaluation
Journal title
Journal of Monetary Economics
Serial Year
2010
Journal title
Journal of Monetary Economics
Record number
846390
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