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policy analysis. It suggests that the best method of solving the puzzle implies a close connection between theory and …
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The central bank's optimal reaction to foreign and domestic shocks is analyzed in an inflation targeting model allowing … that the interest rate response to foreign shocks is smaller when pass-through is low. Second, the inflation …-through ; exchange rate volatility ; inflation targeting ; monetary policy ; small open economy …
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Few propositions in macroeconomics are less controversial than long-run money neutrality, yet clear and robust empirical support has not been found in time series studies. Bernanke and Mihov (1998) are comparatively successful in this hunt, but their output response to monetary policy shocks...
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literature. An advantage here is that the asymptotic distribution theory is standard. The performance of the tests is compared to …
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