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GDP Data Revisions and Forward-Looking Monetary Policy in Switzerland

Jordan, Thomas J. and Kugler, Peter and Lenz, Carlos and Savioz, Marcel R.. (2005) GDP Data Revisions and Forward-Looking Monetary Policy in Switzerland. WWZ Discussion Papers, 2005 (05).

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Official URL: https://edoc.unibas.ch/61261/

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Abstract

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR model consisting of four variables taking into account data revisions for GDP. First, the paper develops an analytical method to analyze the effect of data revision errors in GDP on the ex ante or conditional inflation-output-growth volatility trade-off and applies it to Swiss data. Second, the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. In general, the results obtained suggest that focusing monetary policy on GDP growth instead on inflation may lead to an inefficient policy with both increased medium term inflation and GDP growth volatility in the presence of GDP data revisions.
Faculties and Departments:06 Faculty of Business and Economics
06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Lenz, Carlos and Jordan, Thomas and Kugler, Peter
Item Type:Working Paper
Publisher:WWZ, University of Basel
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2005/05
Last Modified:09 Mar 2018 10:53
Deposited On:08 Mar 2018 08:57

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