Central bank research hub - Papers by Fidel González
https://www.bis.org/cbhub/list/author/author_4050/index.rss
Research hub papers by author Fidel GonzálezenUncertainty about the Persistence of Cost-Push Shocks and the Optimal Reaction of the Monetary Authority.
http://www.banxico.org.mx/documents/{66932DD9-AD1F-4CA5-126D-505703BE8534}.pdf
Bank of Mexico Working Papers by Rodríguez Arnulfo; González Fidel; González García Jesús R.Uncertainty about the Persistence of Cost-Push Shocks and the Optimal Reaction of the Monetary Authority.2007-03-08T07:14:00ZIn this paper we formalize the uncertainty about the persistence of cost-push shocks using an open economy optimal control model with Markov regime-switching and robust control. The latter is used in only one of the regimes producing relatively more persistent cost-push shocks in that regime. Conditional on being in the regime with relatively less persistence, we obtain two main results: a) underestimating the probability of switching to the regime with relatively more persistent cost-push shocks causes higher welfare losses than its overestimation; and b) the welfare losses associated with either underestimation or overestimation of such probability increase with the size of the penalty on inflation deviations from its target.Uncertainty about the Persistence of Cost-Push Shocks and the Optimal Reaction of the Monetary Authority.Full texthttp://www.banxico.org.mx/documents/{66932DD9-AD1F-4CA5-126D-505703BE8534}.pdfR. González García JesúsArnulfo RodríguezFidel GonzálezRodríguez Arnulfo; González Fidel; González García Jesús R.2007Bank of Mexico Working Papers