Citation

Discussion Paper Details

Please find the details for DP3405 in an easy to copy and paste format below:

Full Details

Title: Non-Linear Monetary Policy Rules: Some New Evidence for the US

Author(s): Juan J. Dolado, Ram�n Mar�a-Dolores and Francisco J. Ruge-Murcia

Publication Date: June 2002

Keyword(s): asymmetric preferences, inflation targets, monetary policy, non-linear Phillips curve and non-linear Taylor rules

Programme Area(s): International Macroeconomics

Abstract: This Paper derives optimal monetary policy rules in setups where certainty equivalence does not hold because either central bank preferences are not quadratic, and/or the aggregate supply relation is non-linear. Analytical results show that these features lead to sign and size asymmetries, and non-linearities in the policy rule. Reduced-form estimates indicate that US monetary policy can be characterized by a non-linear policy rule after 1983, but not before 1979. This finding is consistent with the view that the Fed?s inflation preferences during the Volcker-Greenspan regime differ considerably from the ones during the Burns-Miller regime.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3405

Bibliographic Reference

Dolado, J, Mar�a-Dolores, R and Ruge-Murcia, F. 2002. 'Non-Linear Monetary Policy Rules: Some New Evidence for the US'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3405