Determining how monetary policy makers react to changes in key economic variables has been of major interest to monetary economists. Estimates of monetary policy rules (reaction functions) are a widely used method for doing this. Behavior differs under different policy regimes, as in rule-based systems or chronic inflation. In practice, estimates of instrument rules have been used to descri...

this research follows two aims in case of the iranian economy. first, study of the presence of inflation persistency, and second, looking for an optimal monetary policy rule. results show that inflation in the economy of iran is persistent, in which, short-term and long-term effects of monetary policy should be considered. for this purpose, a loss function for the central bank with arguments of...

a r t i c l e i n f o JEL classification: C11 E32 E52 Keywords: New Keynesian models Small open economy Monetary policy Taylor rules Bayesian methods Using the Bayesian approach, a small open economy DSGE model was estimated using a sample of quarterly data for three Central and Eastern Europe economies, Czech Republic, Hungary and Poland. The hypothesis that central banks react to exchange rat...

Monetary policy uncertainty affects the transmission of monetary shocks to longer-term nominal and real yields. For a given shock, reaction yields is more pronounced when level low. Primary dealers other investors adjust their interest rate positions low than high. These portfolio adjustments likely explain larger pass-through shock bond findings shed new light on role that plays in financial m...

This paper studies the nature of monetary policy with …nancial intermediaries that provide loans for working capital in a cash-in-advance model with indivisible labor. Monetary policy occurs through money injections either directly to families or to …nancial intermediaries. Injections to families produce an in‡ation tax while injections directly to …nancial intermediaries provide an in‡ation su...

In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: JEL classification: E32 E52 E62 E63 Keywords: Optimal simple policy rules Timeless perspective optimal policy Monetary polic...

The aim of the present study is to detect the chaotic behavior in monetary economic relevant dynamical system. The study employs three different forms of Taylor rules: current, forward, and backward looking. The result suggests the existence of the chaotic behavior in all three systems. In addition, the results strongly represent that using expectations in policy rule especially rational expect...

The paper considers a simple model in which monetary and …scal policies are formally independent, but still interdependent through spillovers of macroeconomic outcomes. It shows that the average equilibrium levels of in‡ation, de…cit, debt, and output depend on the two policies’ (i) potency (elasticity of output with respect to the policy instruments); (ii) ambition (the level of their output t...

Reliable measures of the size and direction of changes in monetary policy are very crucial for examining the effects of monetary policy on the economy. Monetary Condition Index (MCI) can be used as a tool to assess the stance of monetary policy. This index is defined as the weighted average of different monetary transmission mechanism relative to their values in a base period. The weights in MC...