Nonlinear Taylor Rules and Asymmetric Preferences in Central Banking : Evidence from the United Kingdom and the United States ∗

@inproceedings{Cukierman2008NonlinearTR,
  title={Nonlinear Taylor Rules and Asymmetric Preferences in Central Banking : Evidence from the United Kingdom and the United States ∗},
  author={A. R. Cukierman and Anton Muscatelli},
  year={2008}
}
This paper explores theoretically and empirically the view that Taylor rules are often nonlinear due to asymmetric central bank preferences, and that the nature of these asymmetries changes across different policy regimes. The theoretical model uses a standard new Keynesian framework to establish equivalence relations between the shape of nonlinearities in Taylor rules and asymmetries in monetary policy objectives. These relations are estimated and tested for the United Kingdom (UK) and the… CONTINUE READING
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