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Modelling Monetary Policy Reaction Functions

The New Zealand Review of Economics and Finance

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Field Value
 
Title Modelling Monetary Policy Reaction Functions
 
Creator Watson, Elizabeth
 
Description This paper considers how monetary policy is modelled currently, with particular reference to the Reserve Bank of New Zealand’s dynamic stochastic general equilibrium model: Kiwi Inflation Targeting Technology (K.I.T.T.). By considering the role and objectives of monetary policy along with its dynamic effects, it is suggested that monetary policy might better be modelled using micro-foundations, where the path of monetary policy is determined by an optimising central bank. In the context of the New Zealand economy, the monetary authority’s optimisation problem is postulated and developed. To conclude, an alternative monetary policy reaction function is suggested for use in K.I.T.T..
 
Publisher The New Zealand Review of Economics and Finance
 
Date 2013-05-28
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://ojs.victoria.ac.nz/nzref/article/view/1734
 
Source The New Zealand Review of Economics and Finance; Vol 1 (2011): New Zealand Review of Economics and Finance
2324-478X
2324-4771
 
Language eng
 
Relation https://ojs.victoria.ac.nz/nzref/article/view/1734/1575