Bordo, Michael D.; Erceg, Christopher J.; Levin, Andrew T. - 2006
between
3
inflation and its target value. Moreover, we assume that agents had imperfect information about
the Federal Reserve … maintained a low and steady inflation rate.
But beginning in the mid-1960s, the Federal Reserve permitted inflation to rise to … Federal Reserve, (GNP) price inflation had reached 9 percent.
Two months after taking o !ce in August 1979, Volcker announced …