Castelnuovo, Efrem; Surico, Paolo - EconWPA - 2005
bank response to inflation. These sub-samples correspond to the pre-Volcker period for the US and the pre-inflation … equilibria arise. In contrast, the DSGE model never generates on impact a positive inflation response to a policy shock. The … omission in the VARs of a variable capturing the high persistence of expected inflation under indeterminacy is found to account …