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- Title
Theoretical conditions under which monetary policies are effective and practical obstacles to their verification.
- Authors
Swamy, P. A. V. B.; Tavlas, George S.
- Abstract
We derive (i) necessary and sufficient and (ii) sufficient conditions for monetary policies to conform to what the literature characterizes as good policies. We show that the biasing effects of omitted variables, measurement errors, and misspecifications of '*true" functional forms on the coefficients of monetary-policy reaction functions present practical obstacles to verifying such conditions.
- Subjects
MONETARY policy; POLICY analysis; MEASUREMENT errors; ECONOMICS; RESEARCH
- Publication
Economic Theory, 2005, Vol 25, Issue 4, p999
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-004-0482-8