Tinsley, P.A.; Kozicki, Sharon - Society for Computational Economics - SCE - 2004
Despite a large literature documenting that the efficacy of monetary policy depends on how inflation expectations are … anchored, many monetary policy models assume: (1) the inflation target of moentary policy is constant; and, (2) the inflation … changes to the inflation target and transitory perturbations of the short-term real rate. The public sector cannot correctly …