Table A1 Variances for alternative instruments
ρ i.) Forward-looking ii.) Forward-looking iii.) Backward-looking Interest rate policy Interest rate policy# Money growth policy
varπ varξ vary varξ varR varξ varπ varξ vary varξ varR varξ varπ varξ vary varξ varR varξ 0.95 0.012 0.080 0.0057 7.6/104 0.033 2.8/104 6.1/104 0.035 3.3/104 0.9 0.069 0.15 0.025 0.0010 0.028 4.5/104 9.9/104 0.029 5.1/104 0.8 0.53 0.23 0.15 0.0021 0.022 8.6/104 0.0022 0.023 9.6/104 0.7 0.046 0.0046 0.012 0.0037 0.020 0.0014 0.0041 0.021 0.0016 0.6 0.019 3.2/104 0.0046 0.0063 0.020 0.0023 0.0069 0.021 0.0025 0.5 0.011 0.21/105 0.0025 0.011 0.022 0.0037 0.012 0.023 0.0040 0.4 0.0071 3.1/105 0.0016 0.019 0.028 0.0063 0.021 0.030 0.0068
Note: The eigenvalue under ii.) and iii.) equals 0.83 and#indicates indeterminacy.
Table A2 Welfare losses L/varξ for a smaller velocity (ν = 0.44)
ρ i.) Forward-looking ii.) Backward-looking iii.) Forward-looking Interest rate policy Interest rate policy# Money growth policy
0.95 0.0037 0.0018 0.0021 0.9 0.0096 0.0017 0.0021 0.8 0.16 0.0018 0.0028 0.7 0.25 0.0025 0.0043 0.6 0.035 0.0039 0.0067 0.5 0.015 0.0064 0.011 0.4 0.0089 0.011 0.019
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