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Squeezing the Interest Rate Smoothing Weight with a Hybrid Expectations Model

Castelnuovo, Efrem - 2003

Successful descriptions of short-term nominal interest rates inertial behavior have frequently been obtained with small scale macro models in which a Central Banker minimizes a loss function embedding an argument labelled as interest rate smoothing. The rationale for this argument is not...

Persistent link: https://www.econbiz.de/10011325035

What does monetary policy reveal about central bank's preferences?

Castelnuovo, Efrem; Surico, Paolo - 2002

The design of monetary policy depends upon the targeting strategy adopted by the central bank. This strategy describes …, we develop a novel calibration method to identify central bank's preferences from the estimates of an optimal Taylor …

Persistent link: https://www.econbiz.de/10011335670

Model uncertainty, optimal monetary policy and the preferences of the Fed

Castelnuovo, Efrem; Surico, Paolo - 2001

outcome of an optimizing central bank behavior, the ability of any derived policy rule to match the data relies on so large … uncertainty into the identification of central bank's preferences. The thick robust policy rule shows the kind of smoothness …

Persistent link: https://www.econbiz.de/10011608851