Asymmetric preferences in real-time learning and the Taylor rule

Branch (2014) shows that the asymmetric preference of professional forecasters enhances the fit of the original Taylor rule with respect to recent US monetary policy. This paper investigates the stability of the Taylor rule with asymmetric preference under adaptive learning. We find that when policy omits asymmetry and learning volatility, a more vigorous response to inflation than the pure Taylor principle is required.

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Year of publication:	2014
Authors:	Ikeda, Taro
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 124.2014, 3, p. 487-489
Publisher:	Elsevier
Subject:	Asymmetric preference \| Adaptive learning \| Taylor rule

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Type of publication:	Article
Classification:	E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010930739