markedly different target rule in a New Keynesian optimizing framework. Under optimal policy from a timeless perspective (TP …) the target rule involves additional history dependence in the form of lagged inflation. The target rule also depends on … in an open economy target rule price level targeting is no longer consistent with optimal policy. The gains from …

Employing an optimizing framework, this paper shows that a target rule dominates a simple instrument rule when the … focus of monetary policy is on CPI inflation. The target rule approach produces a systematic relationship between the … achieved by the target rule approach. The optimal simple instrument rule also fails to account for the UIP puzzle. In contrast …