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The Great Moderation is often characterized by the decline in the variability of output and inflation from earlier periods. While a multitude of explanations for the Great Moderation exist, notable research has focused on the role of monetary policy. Specifically, early evidence suggested that...
Persistent link: https://www.econbiz.de/10010577863
to the level of inflation gap and the level of output gap. Moreover, we test whether these asymmetries might possibly … output gap when the output gap is relatively high. Thus, the asymmetries in the monetary policy rule seem to indicate …
Persistent link: https://www.econbiz.de/10010729807
This paper investigates the possible existence of asymmetric effects in the response of four central banks to inflation and output gaps as regards the 'sign' and 'size' of those gaps. The evidence obtained both through the estimation of a generalized Taylor rule and an ordered probit model...
Persistent link: https://www.econbiz.de/10005662189
Despite convergence pressures, differences in housing and financial market institutions across the 15 member states of the European Union are still enormous. This paper argues that they have profound effects on the responsiveness of output and inflation in the different countries to changes in...
Persistent link: https://www.econbiz.de/10005504528
This paper estimates the optimal response of the SARB to deviations of inflation and output from their target values over the inflation targeting era. This is achieved using an empirical framework that allows the central bank's policy preferences to be zone-like and asymmetric. The first major...
Persistent link: https://www.econbiz.de/10010573360
In this paper we study asymmetries in the Taylor rule for the United States during the 1970–2012 period. We show that …
Persistent link: https://www.econbiz.de/10011065304
policymakers to correct for inherent asymmetries in the way stock price movements affect the macroeconomy. …
Persistent link: https://www.econbiz.de/10011065334
This paper argues that limited asset market participation is crucial in explaining U.S. macroeconomic performance and monetary policy before the 1980s and their changes thereafter. In an otherwise conventional sticky-price model, standard aggregate demand logic is inverted at low enough asset...
Persistent link: https://www.econbiz.de/10011009942
The United Kingdom is a highly open economy, and has a monetary policy strategy of targeting inflation in consumer prices. In this Paper, we look at the evidence from the UK on inflation behaviour, and examine the propositions from several theoretical models about inflation dynamics in an open...
Persistent link: https://www.econbiz.de/10005662158
The volatile data for inflation, output, and interest rates in the United Kingdom prior to the 1990s, and the relative macroeconomic stability associated with inflation targeting, provide a rich basis for discriminating between rival explanations for the outbreak of stagflation. We examine...
Persistent link: https://www.econbiz.de/10005667056