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Monetary Policy Benchmarks

Methodology

This page contains technical details explaining how we compute the monetary policy benchmarks and how we construct the underlying data.

The technical appendix describes:

  • the underlying data;
  • the modeling assumptions;
  • how we fit the model to the data;
  • how we back out the current state of the economy; and
  • how we implement the alternative monetary policy rules.

We use the Philadelphia Research Intertemporal Stochastic Model-II (PRISM-II) for the forecasts, but we implement the additional step of computing the (counterfactual) effects of changing the policy rule permanently starting in the current quarter.