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July/August 2008

Monetary Policy Under Uncertainty

Posted 2008-07-01

Welcome

by Robert H. Rasche

Posted 2008-07-01

Optimal Monetary Policy Under Uncertainty: A Markov Jump-Linear-Quadratic Approach

by Lars E.O. Svensson and Noah Williams

This paper studies the design of optimal monetary policy under uncertainty using a Markov jump-linear-quadratic (MJLQ) approach. To approximate the uncertainty that policymakers face, the authors use different discrete modes in a Markov chain and take mode-dependent linear-quadratic approximations of the underlying model.

Posted 2008-07-01

Commentary on "Optimal Monetary Policy Under Uncertainty: A Markov Jump-Linear-Quadratic Approach"

by Timothy W. Cogley

Posted 2008-07-01

Commentary on "Optimal Monetary Policy Under Uncertainty: A Markov Jump-Linear-Quadratic Approach"

by Andrew T. Levin

Posted 2008-07-01

Economic Projections and Rules of Thumb for Monetary Policy

by Athanasios Orphanides and Volker Wieland

Monetary policy analysts often rely on rules of thumb, such as the Taylor rule, to describe historical monetary policy decisions and to compare current policy with historical norms. Analysis along these lines also permits evaluation of episodes where policy may have deviated from a simple rule and examination of the reasons behind such deviations.

Posted 2008-07-01

Commentary on "Economic Projections and Rules of Thumb for Monetary Policy"

by Charles I. Plosser

Posted 2008-07-01

Commentary on "Economic Projections and Rules of Thumb for Monetary Policy"

by Patrick Minford

Posted 2008-07-01

House Prices and the Stance of Monetary Policy

by Marek Jarociński and Frank R. Smets

This paper estimates a Bayesian vector autoregression for the U.S. economy that includes a housing sector and addresses the following questions: Can developments in the housing sector be explained on the basis of developments in real and nominal gross domestic product and interest rates? What are the effects of housing demand shocks on the economy? How does monetary policy affect the housing market? What are the implications of house price developments for the stance of monetary policy?

Posted 2008-07-01

Commentary on "House Prices and the Stance of Monetary Policy"

by Robert G. King

Posted 2008-07-01

Commentary on "House Prices and the Stance of Monetary Policy"

by Stephen G. Cecchetti

Posted 2008-07-01

Assessing Monetary Policy Effects Using Daily Federal Funds Futures Contracts

by James D. Hamilton

This paper develops a generalization of the formulas proposed by Kuttner (2001) and others for purposes of measuring the effects of a change in the federal funds target on Treasury yields of different maturities. The generalization avoids the need to condition on the date of the target change and allows for deviations of the effective fed funds rate from the target as well as gradual learning by market participants about the target.

Posted 2008-07-01

Commentary on "Assessing Monetary Policy Effects Using Daily Federal Funds Futures Contracts"

by K. Alec Chrystal

Posted 2008-07-01

Commentary on "Assessing Monetary Policy Effects Using Daily Federal Funds Futures Contracts"

by Kenneth N. Kuttner

Posted 2008-07-01

Panel Discussion

by John B. Taylor, Ben S. Bernanke, and William Poole

John B. Taylor, "The Importance of Being Predictable"

Ben S. Bernanke, "Monetary Policy Under Uncertainty"

William Poole, "The Importance of Being Predictable"

Posted 2008-07-01

Announcements and the Role of Policy Guidance

by Carl E. Walsh

By providing guidance about future economic developments, central banks can affect private sector expectations and decisions. This can improve welfare by reducing private sector forecast errors, but it can also magnify the impact of noise in central bank forecasts. 

Posted 2008-07-01

Commentary on "Announcements and the Role of Policy Guidance"

by Marvin Goodfriend

Posted 2008-07-01

Rules-of-Thumb for Guiding Monetary Policy

by William Poole

This article was originally published in the Board of Governors of the Federal Reserve System Open Market Policies and Operating Procedures—Staff Studies, July 1971. It is reprinted here as an addendum to these conference proceedings.


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