Changes in GDP’s measurement error volatility and response of the monetary policy rate: two approaches

Citation data:

Banco de la Republica de Colombia, Borradores de Economia, No: 814

Publication Year:
Usage 175
Abstract Views 132
Downloads 43
Repository URL:
RePec URLs:
Parra-Polanía, Julián Andrés; Vargas-Riaño, Carmiña Ofelia
Banco de la República
E58 - Central Banks and Their Policies; E52 - Monetary Policy; D81 - Criteria for Decision-Making under Risk and Uncertainty; Prudence; Robustness; Measurement error; Optimal monetary policy; Política monetaria; Producto interno bruto -- Mediciones; Variables económicas; E52 - Política monetaria; D81 - Criterios para la toma de decisiones con riesgo e incertidumbre; E58 - Bancos centrales y sus políticas
paper description
Using a stylized model in which output is measured with error, we derive the optimal policy response to the demand shock signal and to changes in the measurement error volatility from two different perspectives: the minimization of the expected loss (from