Working Paper
The limits of counter-cyclical monetary policy: an analysis based on optimal control theory and vector autoregressions
Abstract: Optimal control theory can be combined with the probability structure of a vector autoregression to investigate the tradeoffs available to policymakers. Such an approach obtains results based on a minimal set of assumptions about the economy and the structure of policy actions. This paper takes this approach to analyze the potential effectiveness of countercyclical monetary policy.
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Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Working Papers
Publication Date: 1986
Number: 297