scholarly journals Monetary Policy, Trend Inflation, and the Great Moderation: An Alternative Interpretation: Comment Based on System Estimation

2015 ◽  
Author(s):  
Willem Van Zandweghe ◽  
Takushi Kurozumi ◽  
Yasuo Hirose
Keyword(s):  
Monetary Policy ◽  
Alternative Interpretation ◽  
Great Moderation ◽  
Trend Inflation ◽  
Policy Trend

Monetary Policy, Trend In ation and the Great Moderation: An Alternative Interpretation - Comment

2015 ◽  
Vol 2015 (1127) ◽  
pp. 1-20 ◽  
Author(s):  
Jonas E. Arias ◽  
◽  
Guido Ascari ◽  
Nicola Branzoli ◽  
Efrem Castelnuovo
Keyword(s):  
Monetary Policy ◽  
Alternative Interpretation ◽  
Great Moderation ◽  
Policy Trend

scholarly journals Monetary Policy, Trend Inflation, and the Great Moderation: An Alternative Interpretation

2011 ◽  
Vol 101 (1) ◽  
pp. 341-370 ◽  
Author(s):  
Olivier Coibion ◽  
Yuriy Gorodnichenko
Keyword(s):  
Alternative Interpretation ◽  
New Keynesian ◽  
Positive Trend ◽  
Us Economy ◽  
Trend Inflation ◽  
The Us ◽  
Before And After ◽  
New Keynesian Models ◽  
Policy Trend ◽  
Theoretical Results

With positive trend inflation, the Taylor principle does not guarantee a determinate equilibrium. We provide new theoretical results on determinacy in New Keynesian models with positive trend inflation and new empirical findings on the Federal Reserve's reaction function before and after the Volcker disinflation to find that, (i) while the Fed likely satisfied the Taylor principle before Volcker, the US economy was still subject to self-fulfilling fluctuations in the 1970s, (ii) the US economy switched to determinacy during the Volcker disinflation, and (iii) the switch reflected changes in the Fed's response to macroeconomic variables and the decline in trend inflation. (JEL E12, E23, E31, E32, E52)

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