Welfare-based evalution of alternative loss functions for small open economies

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buir.advisorGürkaynak, Refet S.
dc.contributor.authorÖzhan, Galip Kemal
dc.date.accessioned2016-01-08T18:11:11Z
dc.date.available2016-01-08T18:11:11Z
dc.date.issued2009
dc.departmentDepartment of Economicsen_US
dc.descriptionAnkara : The Department of Economics, Bilkent University, 2009.en_US
dc.descriptionThesis (Master's) -- Bilkent University, 2009.en_US
dc.descriptionIncludes bibliographical references leaves 25-26.en_US
dc.description.abstractThis master’s thesis compares outcomes of alternative loss functions to optimal monetary policy in small open economies as the degree of openness increases. The small open economy model that is laid out by Gali and Monacelli (2005) is taken as the baseline framework. Based on a second order Taylor approximation to the utility function, the optimal monetary policy is derived. Then, using the optimal policy as a benchmark, four alternative loss functions are evaluated. Among others, minimizing the variance of domestic inflation achieves the minimum loss and is equivalent to optimal policy. Minimization of CPI inflation variance gives higher losses compared to minimization of domestic inflation variance. Lastly, attributing positive weight to dampening exchange rate fluctuations increases welfare losses.en_US
dc.description.degreeM.A.en_US
dc.description.statementofresponsibilityÖzhan, Galip Kemalen_US
dc.format.extentix, 39 leaves, graphsen_US
dc.identifier.urihttp://hdl.handle.net/11693/14931
dc.language.isoEnglishen_US
dc.publisherBilkent Universityen_US
dc.rightsinfo:eu-repo/semantics/openAccessen_US
dc.subjectLoss functionen_US
dc.subjectsmall open economyen_US
dc.subjectwelfare evaluationen_US
dc.subjectoptimal monetary policyen_US
dc.subject.lccHB141 .O94 2009en_US
dc.subject.lcshEconomics--Mathematical models.en_US
dc.subject.lcshStates, Small--Economic conditions--Mathematical models.en_US
dc.subject.lcshEconomic policy--Mathematical models.en_US
dc.subject.lcshMonetary policy--Mathematical models.en_US
dc.subject.lcshInflantion (Finance)en_US
dc.titleWelfare-based evalution of alternative loss functions for small open economiesen_US
dc.typeThesisen_US

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Dept. of Economics - Master's degree