Central banks should combine monetary rules to achieve objectives – research

Mixing models delivers best results
Mix and match: central bank objectives can't always be met by a single rule

Central banks should combine different monetary rules in order to accomplish policy objectives, according to research published by the Federal Reserve Bank of Dallas.

In Monetary rule, central bank loss and household’s welfare: an empirical investigation, Jonathan Benchimol and André Fourçans identify which monetary policy rule is more effective for central banks to reach their objectives. The authors evaluate and compare the effectiveness of nine rules using US data from 1955 to 2017.


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