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References in periodicals archive ?
The objective of this paper is to estimate monetary policy reaction function. For this purpose, Taylor type rules and McCallum rules are estimated using quarterly data of Pakistan economy over the period 1993 Q3 to 2013 Q2.
Following Taylor (1993), the baseline monetary policy reaction function can be written as follows:
In jargon, if the monetary policy reaction function does not incorporate financial imbalances, the monetary anchor may fail to deliver financial stability."
In these simulations we assume that financial markets, including the monetary policy reaction function, are forward looking.
We extend Romer and Romer 's (2004) analysis of the estimation and the effects of monetary policy shocks by controlling for (1) changes in the monetary policy reaction function and (2) changes in the response of output and prices over time with an extended data set.
The monetary policy reaction function, which measures how the monetary policy instruments react to the information available to the central bank about the state of the economy, adequately represents the central bank's behaviors.
The principal issue in linking these estimated multipliers to the reduced-form fiscal multiplier relevant for the framework of section I is whether and to what extent the monetary policy reaction function in normal times differs from that in a depressed economy.
The paper also includes survey-based inflation expectations in the Chinese monetary policy reaction function. Using business surveys to evaluate the relevance of including forward-looking elements in the estimated equations produces evidence of stabilising policy in terms of inflation.
Equation (8) is a monetary policy reaction function, and equation (9) shows how house prices depend on the short rate and a shock.
In particular, they illustrate variations in the parameters describing the monetary policy reaction function and in the parameters characterizing the pricing behavior of firms and households.
A monetary policy disturbance arises from an action by the monetary authority that deviates from the model-specified monetary policy reaction function, which identifies and distinguishes between money supply and money demand.
Accordingly, the dynamics of the alternative monetary policy reaction function are given by