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Digital Library of the
European Council for Modelling and Simulation |
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Title: |
Taylor-Type Rules And Permanent Shifts In Productivity Growth |
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Authors: |
William T. Gavin, Benjamin D. Keen, Michael R. Pakko |
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Published in:
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(2009).ECMS
2009 Proceedings edited by J. Otamendi, A. Bargiela, J. L. Montes, L. M. Doncel
Pedrera. European Council for Modeling and
Simulation. doi:10.7148/2009 ISBN: 978-0-9553018-8-9 23rd
European Conference on Modelling and Simulation, Madrid, June
9-12, 2009 |
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Citation
format: |
Gavin, W. T., Pakko,
M. R., & Keen, B. D. (2009). Taylor-Type Rules And Permanent Shifts In
Productivity Growth. ECMS 2009 Proceedings edited by J. Otamendi,
A. Bargiela, J. L. Montes, L. M. Doncel Pedrera (pp.
457-462). European Council for Modeling and Simulation. doi:10.7148/2009-0457-0462 |
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DOI: |
http://dx.doi.org/10.7148/2009-0457-0462 |
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Abstract: |
This paper uses simulation
techniques to evaluate variants of the Taylor rule in a model where the
underlying trend rate of growth is subject to permanent shifts. We show that
the original Taylor rule is not particularly well-formulated
for dealing with this type of environment. However, we also find that a
Taylor-type rule in which the output gap is replaced by output growth or one
that is augmented by an explicit policy response to deviations of the price
level from a target path will look much like the optimal policy. |
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