Do Nonlinear Monetary Policy Rules Outperform the Taylor Rule in Forecasting Exchange Rates?

2021 ◽  
Vol 7 (1) ◽  
pp. 3-19
Author(s):  
Sookyung Park
Keyword(s):  
Monetary Policy ◽  
Exchange Rates ◽  
Taylor Rule ◽  
Policy Rules ◽  
Monetary Policy Rules

A Review of Monetary Policy Rules

2001 ◽  
Vol 39 (2) ◽  
pp. 562-566 ◽  
Author(s):  
Christopher A Sims
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Taylor Rule ◽  
Real Output ◽  
Policy Rule ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
John Taylor

This article reviews Monetary Policy Rules, edited by John Taylor. The book evaluates the Taylor rule, a policy rule that specifies changes in the central bank's interest rate according to what is happening to two variables, real output and inflation. Questions are raised about (a) how well the models fit the data; (b) the validity of the assumption that there has been clear improvement in monetary policy; and (c) the rule's microfoundations.

Friedman redux: Restricting monetary policy rules to support flexible exchange rates

2005 ◽  
Vol 87 (3) ◽  
pp. 291-299 ◽  
Author(s):  
Michael B. Devereux ◽  
Kang Shi ◽  
Juanyi Xu
Keyword(s):  
Monetary Policy ◽  
Exchange Rates ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Flexible Exchange Rates

scholarly journals MONETARY POLICY RULES IN MALAYSIA, SINGAPORE AND THAILAND

2020 ◽  
Vol 23 (4) ◽  
pp. 565-596
Author(s):  
Chai-Thing Tan ◽  
Azali Mohamed
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Government Spending ◽  
Taylor Rule ◽  
Central Banks ◽  
Monetary Policies ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
The Exchange Rate ◽  
Monetary Policy Reaction Function

This paper investigates whether monetary policies in Malaysia, Thailand and Singapore are best represented by either the Taylor rule or the augmented Taylor rule. It finds that the augmented Taylor rule, which incorporates the exchange rate and government spending, best represents monetary policies in these countries. The results show that past inflation and the output gap play a role in the monetary policy reaction function in Malaysia and Thailand. The results further show a strong preference towards interest rate smoothing, government spending, and the exchange rate by the central banks.

scholarly journals Monetary Policy Rules in Emerging Countries: Is There an Augmented Nonlinear Taylor Rule?

2016 ◽  
Author(s):  
Guglielmo Maria Caporale ◽  
Abdurrahman Nazif Catik ◽  
Mohamad Helmi ◽  
Faek Menla Ali ◽  
Coskun Akdeniz
Keyword(s):  
Monetary Policy ◽  
Taylor Rule ◽  
Emerging Countries ◽  
Policy Rules ◽  
Monetary Policy Rules

scholarly journals Monetary policy rules in emerging countries: Is there an augmented nonlinear taylor rule?

2018 ◽  
Vol 72 ◽  
pp. 306-319 ◽  
Author(s):  
Guglielmo Maria Caporale ◽  
Mohamad Husam Helmi ◽  
Abdurrahman Nazif Çatık ◽  
Faek Menla Ali ◽  
Coşkun Akdeniz
Keyword(s):  
Monetary Policy ◽  
Taylor Rule ◽  
Emerging Countries ◽  
Policy Rules ◽  
Monetary Policy Rules

scholarly journals MEKANISME PENGENDALIAN MONETER DENGAN INFLASI SEBAGAI SASARAN TUNGGAL

2003 ◽  
Vol 2 (4) ◽  
pp. 68-122
Author(s):  
Erwin Haryono ◽  
Wahyu Agung Nugroho ◽  
Wahyu Pratomo
Keyword(s):  
Monetary Policy ◽  
Taylor Rule ◽  
Policy Rule ◽  
Policy Rules ◽  
Intermediate Target ◽  
Monetary Policy Rules

Sementara diskusi teoritis tentang mekanisme transmisi kebijakan moneter belum konklusif, studi ini menyarankan perumusan kebijakan moneter untuk mencapai sasaan tunggal inflasi berdasarkan transmisi suku bunga. Dalam hal ini, suku bunga jangka pendek berfungsi sebagai target operasional kebijakan moneter yang diharapkan dapat mempengaruhi agregat demand, untuk selanjutnya mempengaruhi pencapaian sasaran inflasi. Selain itu, perubahan suku bunga juga dapat melewati jalur nilai tukar dan ekspektasi masyarakat sebelum akhirnya mempengaruhi inflasi. Tidak seperti kerangka kebijakan moneter melalui jalur agregat moneter, kerangka ini tidak secara eksplisit memasukan fungsi intermediate target. Sebagai penggantinya, beragam information variables berfungsi sebagai indikator tekanan inflasi.Sebagai acuan bagi kebijakan moneter, yaitu bagaimana suku bunga jangka pendek harus disesuaikan untuk mencapai sasaran inflasi, disarankan penggunaan monetary policy rules yang dikembangkan dari Taylor rule dengan melakukan beberapa penyesuaian. Untuk hal ini, diperlukan penelitian tersendiri dengan mengakomodasi karakteristik yang relevan untuk kasus Indonesia. Namun, dengan terdapatnya unsur ketidakpastian dalam mekanisme transmisi, penggunaan policy rule tersebut tidak dimaksudkan untuk digunakan secara kaku (strict). Dalam hal ini, masih tersedia ruang bagi kebijakan yang bersifat discretionary, yaitu dengan melakukan assesment atas informasi yang diperoleh dari berbagai information variables.

scholarly journals Monetary Policy Rules in Emerging Countries: Is There an Augmented Nonlinear Taylor Rule?

2016 ◽  
Author(s):  
Guglielmo Maria Caporale ◽  
Abdurrahman Nazif Catik ◽  
Mohamad Helmi ◽  
Faek Menla Ali ◽  
Coskun Akdeniz
Keyword(s):  
Monetary Policy ◽  
Taylor Rule ◽  
Emerging Countries ◽  
Policy Rules ◽  
Monetary Policy Rules

scholarly journals Federal Funds Rates Based on Seven Simple Monetary Policy Rules

2016 ◽  
pp. 1-6 ◽  
Author(s):  
Edward S. Knotek ◽  
Randal J. Verbruggge ◽  
Saeed Zaman ◽  
Christian Garciga ◽  
Caitlin Treanor
Keyword(s):  
Decision Making ◽  
Monetary Policy ◽  
Taylor Rule ◽  
Federal Funds ◽  
Policy Rules ◽  
Monetary Policy Rules ◽  
Simple Rules ◽  
Economic Forecasts

Monetary policymakers often use simple monetary policy rules, like the Taylor rule, as an input into their decision-making. However, there are many different simple rules, and there is no agreement on a single "best" rule. We look at the federal funds rates coming from seven simple rules and three economic forecasts to investigate the range of results that can be produced. While there are some commonalities, we document that the differences in the federal funds rates suggested by the rules can be quite pronounced.

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