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Application is made to the evaluation of monetary policy rules.
"Comment," in John B. Taylor, ed., Monetary Policy Rules.
This paper focuses on the design of monetary policy rules for a small open economy.
The second part of the paper considers monetary policy rules and their rationales, and critiques them.
The prescriptions of monetary policy rules play a prominent role in the FOMC's monetary policy deliberations.
In this note news shocks are investigated in the context of monetary policy rules designed to mitigate their effects.
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However, when the storage facility is activated, responding to output in the monetary policy rule becomes less desirable.
This approach is consistent with Milton Friedman's vision of monetary policy, would impose a monetary policy rule, and provide a solid long-run nominal anchor.
In the presence of the zero lower bound, standard business cycle models with a Taylor-type monetary policy rule are prone to equilibrium multiplicity.
Despite the potential interplay between imperfections due to sticky wages and monopoly, the optimal monetary policy rule has a closed-form solution.
This paper contains an analysis of the learnability of the equilibrium in a class of simple, micro-founded models in which the policy authority uses a Taylor-type monetary policy rule.
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