Tetlow, Robert J.; Muehlen, Peter von zur - Federal Reserve Board (Board of Governors of the … - 2002
In his 1999 monograph The Conquest of American Inflation Tom Sargent describes how a policymaker, who applies a constant-gain algorithm in estimating the Phillips curve, can fall into the grip of an induction problem: concluding on the basis of reduced-form evidence that the trade-off between...