Review of the Symmetry or Asymmetry of Monetary Policy Performance Using Quantile Regressions

Monetary policy is the lever by which the Central Bank can achieve economic stability and price control. In this study، the reaction function of the Central Bank to the deviations of target inflation and potential output is used based on Taylor’s rule. The approach which has recently been considered is that the rate of Central Bank reactions to the objectives of output gap and inflation deviation is different in different business cycles. Therefore، in this study، the models are estimated using quantile regression during the period 1353-1389 for the time which Central Bank reaction is symmetric or asymmetric. The results show that the Central Bank does not react to the output gap during the periods of recession and prosperity while it reacts to the inflation deviation in the opposite way.