Coroneo, Laura orcid.org/0000-0001-5740-9315, Corradi, Valentina and Santos Monteiro, Paulo orcid.org/0000-0002-2014-4824 (2013) Testing for optimal monetary policy via moment inequalities. [Preprint - York]
Abstract
The specication 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 in ation that are consistent with optimal policy under either policy regime. We derive testable implications that allow for specication tests and discrimination between the two alternative regimes. The proposed procedure is implemented to examine the conduct of monetary policy in the United States economy.
Metadata
Item Type: | Preprint |
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Authors/Creators: |
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Keywords: | Bootstrap,GMM,Moment Inequalities,Optimal Monetary Policy |
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: | 08 Jun 2023 23:13 |
Last Modified: | 21 Jan 2025 18:30 |
Status: | Published |
Publisher: | Department of Economics and Related Studies, University of York |
Series Name: | Discussion Paper in Economics |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:200152 |