01915cam a22002777 4500001000700000003000500007005001700012008004100029100002200070245012600092260006600218490004200284500002000326520068900346530006101035538007201096538003601168690013901204690006501343700002301408700002201431710004201453830007701495856003801572856002701610w14357NBER20140725174422.0140725s2008 mau||||fs|||| 000 0 eng d1 aBrock, William A.10aDesign Limits and Dynamic Policy Analysish[electronic resource] /cWilliam A. Brock, Steven N. Durlauf, Giacomo Rondina. aCambridge, Mass.bNational Bureau of Economic Researchc2008.1 aNBER working paper seriesvno. w14357 aSeptember 2008.3 aThis paper characterizes the frequency domain properties of feedback control rules in linear systems in order to better understand how different policies affect outcomes frequency by frequency. We are especially concerned in understanding how reductions of variance at some frequencies induce increases in variance at others. Tradeoffs of this type are known in the control literature as design limits. Design limits are important in understanding the full range of effects of macroeconomic stabilization policies. We extend existing results to account for discrete time bivariate systems with rational expectations. Application is made to the evaluation of monetary policy rules. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aC6 - Mathematical Methods • Programming Models • Mathematical and Simulation Modeling2Journal of Economic Literature class. 7aE52 - Monetary Policy2Journal of Economic Literature class.1 aDurlauf, Steven N.1 aRondina, Giacomo.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w14357.4 uhttp://www.nber.org/papers/w14357 uurn:doi:10.3386/w14357