Our analysis is intended to shed light on the issue of whether monetary policy contributed to the recent housing boom and bust. We have estimated and analyzed a model that allows a comparison between actual policy and several alternative Taylor Rules. When the Taylor Rule path was computed using...

We suggest a new way of computing the inflation-output variability tradeoff under inflation forecast targeting. Our approach is based on dynamic, stochastic simulations of the average inflation rate over a two-year horizon using the moving average representation of a vector autoregressive (VAR)...

We present a procedure for evaluating ex ante the effects of alternative paths of a monetary policy tool (the federal funds rate in our illustrations) on output and the price level within a variant of a widely used vector autoregressive model of the U.S. economy. This exercise is a supplement...