Explicit instrument versus targeting rules in the backward-looking model

In the backward-looking model, an explicit instrument rule is almost as efficient as a target rule. An explicit instrument rule leads to a more stable real rate of interest and hence an output stabilization bias compared to the target rule.

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Year of publication:	2010
Authors:	Froyen, Richard T. ; Guender, Alfred V.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 106.2010, 1, p. 64-66
Publisher:	Elsevier
Keywords:	Optimal monetary policy Target rule Explicit instrument rule Stabilization bias Interest rate volatility

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008474008