Estimates of a ‘Pandemic Taylor rule’ loss function

Robert J. Sonora

doi:10.1080/13504851.2022.2089619

Estimates of a ‘Pandemic Taylor rule’ loss function

Robert J. Sonora

Accounting and Finance

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

This article applies a central bank-style loss function to policymaker decision-making during the Covid-19 pandemic. An empirical Taylor rule-style model is used to estimate preference weights associated with lost economic activity and Covid-19 cases and deaths for the four largest US states. Results demonstrate that there are preference differences across states with Republican-led states placing greater weight on economic loss than do those with Democrat governors. Moreover, all states in the sample responded to changes in Covid over the sample period.

Original language	English
Pages (from-to)	2040-2045
Number of pages	6
Journal	Applied Economics Letters
Volume	30
Issue number	15
DOIs	https://doi.org/10.1080/13504851.2022.2089619
State	Published - 2023

Funding

I would like to thank Martina Gottwald-Belinić, Mark Taylor, and two anonymous referees for comments which undoubtedly improved the paper as did discussion in seminars at the University of Montana and the University of Zagreb. Any existing shortcomings are mine alone.

Keywords

Covid-19
health loss function
policymaker preferences

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10.1080/13504851.2022.2089619

Cite this

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abstract = "This article applies a central bank-style loss function to policymaker decision-making during the Covid-19 pandemic. An empirical Taylor rule-style model is used to estimate preference weights associated with lost economic activity and Covid-19 cases and deaths for the four largest US states. Results demonstrate that there are preference differences across states with Republican-led states placing greater weight on economic loss than do those with Democrat governors. Moreover, all states in the sample responded to changes in Covid over the sample period.",

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KW - policymaker preferences

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Estimates of a ‘Pandemic Taylor rule’ loss function

Abstract

Funding

Keywords

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