A Research on extended Taylor's Rule Based on the Macro-Prudential Policy
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| Title | A Research on extended Taylor's Rule Based on the Macro-Prudential Policy
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| Author | Liu Jinquan,Zhang Xiaowan and Fang Yi |
| Organization | JilinUniversity |
| Email | |
| Key Words | macro-prudential; the extended Taylor rule; policies collocation; policies assess |
| Abstract | According to Woodford(2012), this paper focuses on the total social financing as a policy goal, and we introduce the macro-prudential policy into traditional monetary policy rule, and we study the extended Taylor rule through building a DSGE model. We further extend Rudebusch(2001)，in order to research the optimal monetary policy rule under different macroeconomic backgrounds and the collocation of different policy objectives, the policy response and effect of monetary policy rules based on different parameters under different impacts will be investigated. By partitioning the emphasis degrees of monetary policies under different scenarios aiming at different policy objectives, it reflects the policy flexibility in the actual operation. Meanwhile, we can overcome the contradiction of the separation of long-term parameters and short-term goals caused by steady state analysis when we use Woodford(2003) to assess policies. Thefindings indicate that the double goals of the monetary stability and the financial stability can be reached if we perform the extended optimal policy rule.The policy rules reflect that both the certain stability and the dependency of the economic development environment and economic state. |
| Serial Number | WP1338 |
| Time | 2019-02-27 |
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