Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/11685

TitleHow forward-looking is the fed? Direct estimates from a ‘Calvo-type’ rule
Author(s)Gabriel, Vasco J.
Levine, Paul
Spencer, Christopher
KeywordsCalvo-type interest rules
Inflation forecast based rules
GMM
Indeterminacy
Issue date2008
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Citation“NIPE - Working Paper Series”. 9 (2008) 1-10.
Abstract(s)We estimate an alternative type of monetary policy rule, termed Calvo rule, according to which the central bank is assumed to target a discounted infinite sum of future expected inflation. Compared to conventional inflation forecast-based rules, which are typically of the Taylor-type with discrete forward looking horizons, this class of rule is less prone to the problem of indeterminacy. Parameter estimates obtained from GMM estimation provide support for Calvo-type rules, suggesting that the Federal Reserve targeted a mean forward horizon of between 4 and 8 quarters.
TypeWorking paper
URIhttp://hdl.handle.net/1822/11685
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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