Monetary Policy Rules Based on Real-Time Data

摘要

This paper examines the magnitude of these informational problems using Taylor's211u001erule as an example. First, I construct a database of current quarter 211u001eestimates/forecasts of the quantities required by the rule based only on 211u001einformation available in real time. Using this data I reconstruct the policy 211u001erecommendations which would have been obtained in real time.er considerably from 211u001ethose obtained with the ex post revised data. Within-year revisions in the policy 211u001erecommendations are also quite large with a standard deviation exceeding that of 211u001ethe quarterly change of the federal funds rate. Further, I show that estimated 211u001epolicy reaction functions obtained using the ex post revised data can yield 211u001emisleading descriptions of historical policy. Using Fed forecasts I show that in 211u001ethe 1987-1992 period simple forward-looking specications describe policy better 211u001ethan comparable Taylor-type specications, a fact that is largely obscured when 211u001ethe analysis is based on the ex post revised data.