Resource title

Measurement errors in GDP and forward-looking monetary policy: The Swiss case

Resource image

image for OpenScout resource :: Measurement errors in GDP and forward-looking monetary policy: The Swiss case

Resource description

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR consisting of four variables. First, the paper looks at the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination of a strict inflation and output growth targeting rule implied by this SVAR model. Thereby the paper introduces a new analytical method. Second, the paper considers the effect of measurement errors in GDP on this inflation-output-growth volatility trade-off. Third, the paper works at the impact of changing beliefs about the potential growth rate on the variability of output growth and inflation. Finally the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise.

Resource author

Peter Kugler, Thomas J. Jordan, Carlos Lenz, Marcel R. Savioz

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19498

Resource license

Adapt according to the presented license agreement and reference the original author.