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Monetary Policy Analysis (monetary + policy_analysis)
Selected AbstractsModel Selection for Monetary Policy Analysis: How Important is Empirical Validity?,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 1 2009Q. Farooq Akram Abstract We investigate the economic significance of trading off empirical validity of models against other desirable model properties. Our investigation is based on three alternative econometric systems of the supply side, in a model that can be used to discuss optimal monetary policy in Norway. Our results caution against compromising empirical validity when selecting a model for policy analysis. We also find large costs from basing policies on the robust model, or on a suite of models, even when it contains the valid model. This confirms an important role for econometric modelling and evaluation in model choice for policy analysis. [source] Monetary policy analysis and inflation targeting in a small open economy: a VAR approach*JOURNAL OF APPLIED ECONOMETRICS, Issue 4 2001Tor Jacobson Empirical monetary policy research has increased in the last decade, possibly because deregulation and explicit monetary targets have made monetary policy issues more interesting. In particular, within the inflation targeting framework it has been argued that inflation forecasts can be used as optimal intermediate targets for monetary policy, and the development of empirical models that have good forecasting properties is therefore important. This paper shows that a VAR model with long-run restrictions, justified by economic theory, is useful for both forecasting inflation and for analysing other issues that are central to the conduct of monetary policy. Copyright © 2001 John Wiley & Sons, Ltd. [source] The New Keynesian Phillips Curve: From Sticky Inflation to Sticky PricesJOURNAL OF MONEY, CREDIT AND BANKING, Issue 4 2008CHENGSI ZHANG New Keynesian Phillips Curve; inflation survey forecasts; sticky prices; structural breaks; monetary policy The New Keynesian Phillips Curve (NKPC) model of inflation dynamics based on forward-looking expectations is of great theoretical significance in monetary policy analysis. Empirical studies, however, often find that backward-looking inflation inertia dominates the dynamics of the short-run aggregate supply curve. This inconsistency is examined by investigating multiple structural changes in the NKPC for the U.S. between 1960 and 2005, employing both inflation expectations survey data and a rational expectations approximation. We find that forward-looking behavior plays a smaller role during the high and volatile inflation regime to 1981 than in the subsequent period of moderate inflation, providing empirical support for sticky price models over the last two decades. A break in the intercept of the NKPC is also identified around 2001 and this may be associated with U.S. monetary policy in that period. [source] The frequency and costs of individual price adjustment,MANAGERIAL AND DECISION ECONOMICS, Issue 6 2007Alexander L. Wolman How often do the nominal prices of individual goods change? What is the nature of costs of price adjustment? How big are these costs? Answering these questions may be important for constructing macroeconomic models that are useful for monetary policy analysis. The empirical literature reveals that many prices do change infrequently, in part because of physical costs of price adjustment. However, infrequent price adjustment also seems to be related to costs of decision making, to relationships between buyers and sellers, and to strategic behavior among sellers, all in ways that are not yet well understood. Copyright © 2007 John Wiley & Sons, Ltd. [source] | ||||||||||