Comment on Identification with Taylor Rules: is it indeed impossible? Extended version

Cochrane (2007) points out that the Taylor rule parameters in New-Keynesian models are not identified, and thus trying to estimate them through single-equation regressions is pointless. This paper shows in contrast that this observation holds only for economies that do not display inflation inertia or habit formation. These inherent features of aggregate data allow to correctly identify the parameters of the monetary policy rule by single-equation analysis.

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Year of publication:	2008
Authors:	Carrillo, Julio A.
Institutions:	Graduate School of Business and Economics (GSBE), School of Business and Economics
Subject:	monetary economics

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Extent:	application/pdf
Series:	Research Memorandum.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Research Memoranda Number 034
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011201994