How different are money supply rules from Taylor rules?

Minford, Anthony Patrick Leslie ORCID: https://orcid.org/0000-0003-2499-935X, Perugini, Francesco and Srinivasan, Naveen 2003. How different are money supply rules from Taylor rules? Indian Economic Review 38 (2) , pp. 157-166.

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Abstract

In this paper we show that a money supply rule (a Taylor-type rule) and a Taylor rule produce substantial stochastic differences in the behaviour of the economy. Hence it remains an open question whether one or other type of central bank behaviour does a better job in welfare terms - contrary to a recent study (Clarida et al. 1999) which called Taylor rules the modern 'science of monetary policy', thereby suggesting that other rules are essentially inferior. We show with illustrative calibration that the rules may produce very different welfare outcomes.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory
Publisher:	Department of Economics, Delhi School of Economics, University of Delhi
ISSN:	0019-4670
Last Modified:	21 Oct 2022 10:23
URI:	https://orca.cardiff.ac.uk/id/eprint/40041

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