Designing a Simple Loss Function for Central Banks is popular PDF and ePub book, written by Davide Debortoli in 2017-07-19, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Designing a Simple Loss Function for Central Banks can be Read Online from any device for your convenience.
Designing a Simple Loss Function for Central Banks Book PDF Summary
Yes, it makes a lot of sense. This paper studies how to design simple loss functions for central banks, as parsimonious approximations to social welfare. We show, both analytically and quantitatively, that simple loss functions should feature a high weight on measures of economic activity, sometimes even larger than the weight on inflation. Two main factors drive our result. First, stabilizing economic activity also stabilizes other welfare relevant variables. Second, the estimated model features mitigated inflation distortions due to a low elasticity of substitution between monopolistic goods and a low interest rate sensitivity of demand. The result holds up in the presence of measurement errors, with large shocks that generate a trade-off between stabilizing inflation and resource utilization, and also when ensuring a low probability of hitting the zero lower bound on interest rates.
Detail Book of Designing a Simple Loss Function for Central Banks PDF
- Author : Davide Debortoli
- Release : 19 July 2017
- Publisher : International Monetary Fund
- ISBN : 9781484309278
- Genre : Business & Economics
- Total Page : 56 pages
- Language : English
- PDF File Size : 16,8 Mb
If you're still pondering over how to secure a PDF or EPUB version of the book Designing a Simple Loss Function for Central Banks by Davide Debortoli, don't worry! All you have to do is click the 'Get Book' buttons below to kick off your Download or Read Online journey. Just a friendly reminder: we don't upload or host the files ourselves.