Table 2: Policy rules and coefficients in the log-linearized model
Rule |
p11 |
p22 |
πt |
yt |
qt |
Etπt+1 |
Etyt+1 |
optimal policy |
all |
all |
— |
— |
— |
— |
— |
TR |
all |
all |
1.5 |
0.5 |
— |
— |
— |
TR+q |
all |
all |
1.5 |
0.5 |
0.1 |
— |
— |
IFB |
0.25 |
0.25 |
— |
— |
— |
1.5 |
— |
IFB |
0.25 |
0.50 |
— |
— |
— |
1.5 |
— |
IFB |
0.25 |
0.75 |
— |
— |
— |
1.7 |
— |
IFB |
0.50 |
0.25 |
— |
— |
— |
1.9 |
— |
IFB |
0.50 |
0.50 |
— |
— |
— |
1.6 |
— |
IFB |
0.50 |
0.75 |
— |
— |
— |
1.8 |
— |
IFB |
0.75 |
all |
— |
— |
— |
2.8 |
— |
IFB+y |
all |
all |
— |
— |
— |
1.5 |
0.5 |
IFB+y+q |
all |
all |
— |
— |
0.1 |
1.5 |
0.5 |
IFB+y+q agg. |
all |
all |
— |
— |
0.1 |
2.0 |
0.5 |
optimal policy: the optimal policy reacts to all state variables and shocks
TR: Taylor rule
IFB: Inflation forecast based rule
all: 0.25, 0.5, 0.75
19
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