Theoretical conditions under which monetary policies are effective and practical obstacles to their verification

We derive (i) necessary and sufficient and (ii) sufficient conditions for monetary policies to conform to what the literature characterizes as good policies. We show that the biasing effects of omitted variables, measurement errors, and misspecifications of “true” functional forms on the coefficients of monetary-policy reaction functions present practical obstacles to verifying such conditions. Copyright Springer-Verlag Berlin/Heidelberg 2005

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Year of publication:	2005
Authors:	Swamy, P. ; Tavlas, George
Published in:	Economic Theory. - Springer. - Vol. 25.2005, 4, p. 999-1005
Publisher:	Springer
Subject:	Monetary-policy reaction functions \| Monetary-policy rules \| “True” functional forms \| Omitted variables \| Measurement errors

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005370809