Alternative Monetary Policy Rules: A Comparison with Historical Settings for the United States, the United Kingdom, and Japan / Bennett T. McCallum.

Format:

Book

Author/Creator:

McCallum, Bennett T.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7725.

NBER working paper series no. w7725

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Alternative Monetary Policy Rules

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

This paper conducts counterfactual historical analysis of several monetary policy rules by contrasting actual settings of instrument variables with values that would have been specified by the rules in response to prevailing conditions. Of particular interest is whether major policy mistakes, judged ex post, would have been prevented by candidate rules. The rules studied include those of Taylor and McCallum, previously considered by Alison Stuart, plus several additional combinations of instrument and target variables. The time spans examined are 1962-1998 for the U.S. and U.K., and 1972-1998 for Japan. In addition to various substantive findings, the paper develops several methodological arguments. A surprising result is that rules' messages are evidently more dependent upon the specification of their instrument than their target variable.

Notes:

Print version record

June 2000.