A primer on optimal policy projections

Optimal policy projections (OPPs) offer a flexible way to derive scenario-based policy recommendations. This note describes how to calculate OPPs for a simple textbook New Keynesian model and provides illustrations for various examples. It also demonstrates the versatility of the approach by showing OPP results for simulations conducted using a medium-scale DSGE model and a New Keynesian model with heterogeneous households.

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Year of publication:	2024
Authors:	Dengler, Thomas ; Gerke, Rafael ; Giesen, Sebastian ; Kienzler, Daniel ; Röttger, Joost ; Scheer, Alexander ; Wacks, Johannes
Publisher:	Frankfurt a. M. : Deutsche Bundesbank
Subject:	Optimal monetary policy \| macroeconomic projections \| New Keynesian models \| household heterogeneity

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Series:	Technical Paper ; 01/2024
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	1883487153 [GVK] hdl:10419/285379 [Handle] RePEc:zbw:bubtps:285379 [RePEc]
Classification:	C63 - Computational Techniques ; E20 - Consumption, Saving, Production, Employment, and Investment. General ; E31 - Price Level; Inflation; Deflation ; E47 - Forecasting and Simulation ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies
Source:	EconStor

Persistent link: https://www.econbiz.de/10014492873