A New Approach for Modeling and Understanding Optimal Monetary Policy
Posted: 1 Jun 2010
Date Written: September 28, 2007
The coefficients of Taylor (1993)’s monetary policy rule can be seen as portfolio weights. Their optimal values are derived by adapting Merton (1971)’s asset allocation model.
Keywords: optimal monetary policy, portfolio choice, stochastic dynamic programming
JEL Classification: C61, E52, G11
Suggested Citation: Suggested Citation