The Macroeconomic Loss Function: A Critical Note

The standard loss function counts both positive and negative deviations from the output and inflation targets as losses. But if the sample period is long enough, then output growth in excess of the target, and often also inflation rates that are below target, should be counted as gains instead of losses.

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Year of publication:	2002
Authors:	Mayer, Thomas
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	loss functions \| policy evaluation

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Series:	CESifo Working Paper ; 771
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	869759779 [GVK] hdl:10419/75949 [Handle] RePec:ces:ceswps:_771 [RePEc]
Classification:	E37 - Forecasting and Simulation ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General ; E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Source:	EconStor

Persistent link: https://www.econbiz.de/10010315309