MARTIN, CHRISTOPHER; MILAS, COSTAS - In: Manchester School 78 (2010) 2, pp. 110-125
The opportunistic approach to monetary policy is an influential but untested model of optimal monetary policy. We provide the first tests of the model, using US data from 1983Q1 to 2004Q1. Our results support the opportunistic approach. We find that policy-makers respond to the gap between...