Smets, Frank (contributor); Wouters, Rafael (contributor) - 2004
from the current changes in inflation and the output gap. Finally, we assume that there
are two monetary policy shocks …-stationary inflation objective, the short run dynamics of monetary
policy does not seem to have changed much over time.
Overall, the main … shock, and the
temporary monetary policy shock. As mentioned before, in the longer run also the inflation objective
shock …