Cross-checking optimal monetary policy with information from the Taylor rule

This paper shows that monetary policy should be delegated to a central bank that cross-checks optimal policy with information from the Taylor rule. Placing some weight on deviations from a Taylor rule reduces the stabilization bias of discretionary monetary policy.

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Year of publication:	2012
Authors:	Tillmann, Peter
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 1, p. 204-207
Publisher:	Elsevier
Subject:	Optimal monetary policy \| Stabilization bias \| Monetary policy delegation \| Robustness \| Taylor rule

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Type of publication:	Article
Classification:	E43 - Determination of Interest Rates; Term Structure Interest Rates ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	RePEc - Research Papers in Economics

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