Targeting versus Instrument Rules for Monetary Policy: What is Wrong with McCallum and Nelson?

  • Lars E.O. Svensson
  • Published 2005


In their struggle against targeting rules, however, McCallum and Nelson seem to face an uphill battle. There is now a rapidly growing literature by many authors that successfully applies targeting rules to monetary policy analysis. This literature includes recent contributions by Benigno and Benigno (2003), Benigno and Woodford (2004a,b), Cecchetti (1998… (More)