Orphanides, Athanasios (contributor); … - 2005
burden placed on agents to infer central bank intentions.
1
2 An estimated model of the U.S. economy
For our analysis, we …∗t)+epi,t, (1)
ut = 0.257uet+1 +1.170ut−1 −0.459ut−2 −0.032u∗t +0.043(rat−1 −r∗t)+eu,t, (2)
with innovation standard errors equal to … low
end of the range of estimates of these variances, for which case we assume σeu∗ = 0.070
2
and σer∗ = 0.085. Finally …