Toolkit predicts optimal policy projections, guiding effective monetary decisions during crises.
The article introduces a toolkit for predicting optimal policies in economics. It requires minimal information and can handle various policy scenarios and constraints. The toolkit is compatible with Dynare software, making it easy to use. By analyzing US monetary policy during the Great Financial Crisis, the researchers found that the Fed's planned policy rate was close to optimal, but a more aggressive QE program could have been beneficial.