The Role of Policy Rules in Inflation Targeting

Kuttner, Kenneth N.

doi:10.20955/r.86.89-112

Cited by 31 publications

(40 citation statements)

References 51 publications

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“…4 Drawing on experiences from the US, Green (2001) also emphasises how institutional design matters for transparency, as a complement to the timing and format of public release of minutes of policy meetings. 5 Kuttner (2003) uses some fairly simple rules to compare the monetary policies in New Zealand, Sweden, and the UK with monetary policy in the US. 6 We are grateful to Petra Geraats for making the importance of this distinction clear to us.…”

Section: Introductionmentioning

confidence: 99%

How Useful are Simple Rules for Monetary Policy? The Swedish Experience

Berg

Jansson²,

Vredin

2006

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

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Section: Introductionmentioning

confidence: 99%

How Useful are Simple Rules for Monetary Policy? The Swedish Experience

Berg

Jansson²,

Vredin

2006

SSRN Journal

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“…Thus, forecast-based rules can be a fairly precise and yet compact tool to characterize historical monetary policy decisions, as shown by Kuttner (2004) who evaluates forecast-based rules for New Zealand, Sweden, the United Kingdom and the United States. Gorter, Jacobs & de Haan (2008, 2009 provide evidence for the performance of interest rate rules for the European Central Bank, based on expectations data constructed from Consensus Economics forecasts.…”

Section: Forecast Uncertainty and The Bank Of England Interest Rate Dmentioning

confidence: 99%

“…Levin, Wieland & Williams (2003) or Kuttner (2004). The functional forward-looking specification is also known from Clarida, Galí & Gertler (1998, 2000.…”

Section: The Regression Modelmentioning

confidence: 99%

Forecast Uncertainty and the Bank of England Interest Rate Decisions

Schultefrankenfeld

2013

SSRN Journal

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Abstract:To assess the Bank of England Monetary Policy Committee decisions about the Official Bank Rate under forecast uncertainty, I estimate simple forecast-based interest rate rules augmented by the forecast standard deviations recovered directly from the Inflation Report fan charts. I find that interest rate decisions react to deviations of the medium-term forecasts for inflation from target in order to pursue the inflation target. Forecast inflation uncertainty has a strongly intensifying effect on this reaction. Information from output growth is utilized in the form of near-term forecasts. The associated forecast uncertainty of output growth has an attenuating effect on the interest rate reaction. When accounting for asymmetries in forecast uncertainty I find that forecast upward risks to inflation contribute to the intensifying effect of forecast inflation uncertainty. The corresponding downward risks have no significant impact. As regards output growth, asymmetries in the forecast uncertainty have no significant impact on the interest rate reaction at all. Moreover, I find that forecast risks to inflation have a direct effect on the interest rate decisions, in particular when inflation is forecast close to target. Keywords:Forecast

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“…29 Cf., for instance, King (1997). Kuttner (2004) provides an illuminating discussion and clarification of the conflicting definitions of the term "policy rule" in the literature and Svensson (1999) a survey and discussion of inflation targeting in the context of monetary policy rules.…”

Section: Differences To Inflation Targetingmentioning

confidence: 99%

Ten years’ experience with the Swiss National Bank’s monetary policy strategy

Jordan¹,

Peytrignet²,

Rossi³

2010

Swiss J Economics Statistics

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Summary In December 1999 the Swiss National Bank (SNB) abandoned monetary targeting and introduced a new monetary policy strategy. The cornerstones of the new framework are an explicit definition of what the SNB considers to be price stability, a forecast of inflation over a three-year horizon, and a target range for the three-month Swiss franc Libor. The strategy lived up to expectations in every respect and contributed to strengthening the SNB’s credibility. In particular, the new framework’s flexibility proved successful in times of financial stress. The term reference interest rate contains an automatic monetary stabilizer that has insulated the nonfinancial sector from much of the turbulence. The major challenge lying ahead is sustained accuracy in the assessment of future inflation.

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The Role of Policy Rules in Inflation Targeting

Cited by 31 publications

References 51 publications

How Useful are Simple Rules for Monetary Policy? The Swedish Experience

How Useful are Simple Rules for Monetary Policy? The Swedish Experience

Forecast Uncertainty and the Bank of England Interest Rate Decisions

Ten years’ experience with the Swiss National Bank’s monetary policy strategy

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