OPTIMAL POLICY IN RATIONAL EXPECTATIONS MODELS: NEW SOLUTION ALGORITHMS

Richard Dennis

78 citations0/0 files storedMacroeconomic Dynamics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Monetary Policy and Economic Impact Economic Theory and Policy Economic theories and models

Abstract

This paper develops methods to solve for optimal discretionary policies and optimal commitment policies in rational expectations models. These algorithms, which allow the optimization constraints to be conveniently expressed in second-order structural form, are more general than existing methods and are simple to apply. We use several New Keynesian business cycle models to illustrate their application. Simulations show that the procedures developed in this paper can quickly solve small-scale models and that they can be usefully and effectively applied to medium- and large-scale models.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 78 citations exist upstream.

References

1977Rules Rather than Discretion: The Inconsistency of Optimal Plans 1983Staggered prices in a utility-maximizing framework 1999The Science of Monetary Policy: A New Keynesian Perspective 1996Staggered Prices in a Utility-Maximizing Framework 2000Optimal monetary policy with staggered wage and price contracts 1999Monetary Policy Rules 2005Monetary Policy and Exchange Rate Volatility in a Small Open Economy 2000Open-Economy Inflation Targeting

Cited by

2017Coordinating Monetary and Macroprudential Policies 2010Revealing the preferences of the US Federal Reserve 2003Solving for optimal simple rules in rational expectations models 2012Asset Purchase Policy at the Effective Lower Bound for Interest Rates 2010Estimation of Monetary Policy Preferences in a Forward-Looking Model : A Bayesian Approach 2013Coordinating Monetary and Macroprudential Policies

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.