A New Approach for Modeling and Understanding Optimal Monetary Policy
Posted: 1 Jun 2010
Date Written: September 28, 2007
Abstract
The coefficients of Taylor (1993)’s monetary policy rule can be seen as portfolio weights. Their optimal values are derived by adapting Merton (1971)’s asset allocation model.
Keywords: optimal monetary policy, portfolio choice, stochastic dynamic programming
JEL Classification: C61, E52, G11
Suggested Citation: Suggested Citation
Romaniuk, Katarzyna, A New Approach for Modeling and Understanding Optimal Monetary Policy (September 28, 2007). Economics Letters, Vol. 100, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1618327
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