Coroneo, Laura orcid.org/0000-0001-5740-9315, Corradi, Valentina and Santos Monteiro, Paulo orcid.org/0000-0002-2014-4824 (2018) Testing for Optimal Monetary Policy via Moment Inequalities. Journal of Applied Econometrics. pp. 780-796. ISSN 0883-7252
Abstract
The specification of an optimizing model of the monetary transmission mechanism requires selecting a policy regime: commonly, commitment or discretion. In this paper we propose a new procedure for testing optimal monetary policy, relying on moment inequalities that nest commitment and discretion as two special cases. The approach is based on the derivation of bounds for inflation that are consistent with optimal policy under either policy regime. We derive testable implications that allow for specification tests and discrimination between the two alternative regimes. The proposed procedure is implemented to examine the conduct of monetary policy in the US economy.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 John Wiley & Sons, Ltd. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details |
Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 28 Feb 2018 14:40 |
Last Modified: | 16 Oct 2024 14:30 |
Published Version: | https://doi.org/10.1002/jae.2629 |
Status: | Published online |
Refereed: | Yes |
Identification Number: | 10.1002/jae.2629 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:128029 |
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