Edge, Rochelle M.; Laubach, Thomas; Williams, John C. - Crawford School of Public Policy, Australian National … - 2008
output and interest that would prevail absent nominal rigidities. We estimate the degree of uncertainty regarding natural … rates due to parameter uncertainty. We find that optimal Taylor rules under parameter uncertainty respond less to the output … gap and more to price inflation than would be optimal absent parameter uncertainty. We also show that policy rules that …