Optimal monetary policy in an estimated SIR model - Archive ouverte HAL
Article Dans Une Revue European Economic Review Année : 2023

Optimal monetary policy in an estimated SIR model

Résumé

This paper studies the design of Ramsey optimal monetary policy in a Health New Keynesian (HeNK) model with Susceptible, Infected and Recovered (SIR) agents. The nonlinear model is estimated with maximum likelihood techniques on Euro Area data. Our objective is to deconstruct the mechanism by which contagion risk affects the conduct of monetary policy. If monetary policy is the only game in town, we find that optimal policy features significant deviations from price stability to mitigate the effect of the pandemic. The best outcome is obtained when the optimal Ramsey policy is combined with a lockdown strategy of medium intensity. In this case, monetary policy can concentrate on its price stabilization objective.

Mots clés

SIR
Fichier non déposé

Dates et versions

hal-04502674 , version 1 (13-03-2024)

Identifiants

Citer

Ghassane Benmir, Ivan Jaccard, Gauthier Vermandel. Optimal monetary policy in an estimated SIR model. European Economic Review, 2023, 156, pp.104502. ⟨10.1016/j.euroecorev.2023.104502⟩. ⟨hal-04502674⟩
13 Consultations
0 Téléchargements

Altmetric

Partager

More