Monetary policy, inflation and unemployment. In Defense of the Federal Reserve
a model-consistent measure of the unemployment gap. The historical decomposition of the unemployment gap emphasizes the expansionary effects of monetary policy shocks during each of the three recessions that characterize the period. In a counterfactual experiment where the estimated historical monetary policy shocks are turned off, the U.S. economy enters in deflation in 2002 and 2008. Moreover the unemployment gap becomes significantly more volatile. These results suggest that monetary policy shocks did contribute greatly to enhance macroeconomic stability during the last decade.
Year of publication: |
2010
|
---|---|
Authors: | Groshenny, Nicolas |
Institutions: | Society for Economic Dynamics - SED |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Matching Efficiency and Business Cycle Fluctuations
Furlanetto, Francesco, (2012)
-
Mismatch Shocks and Unemployment During the Great Recession
Furlanetto, Francesco, (2013)
-
Do we really know that U.S. monetary policy was destabilizing in the 1970s?
Haque, Qazi, (2019)
- More ...