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This paper tests the ability of popular New Keynesian models, which are traditionally used to study monetary policy and business cycles, to match the data regarding a key channel for monetary transmission: the dynamic interactions between macroeconomic variables and their corresponding...
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Economic theory predicts that intertemporal decisions depend critically on expectations about future outcomes. Using … of expectations for output growth, inflation, and the policy rate. We show that a simple unobserved components model of …
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This paper documents multivariate forecast disagreement among professional forecasters of the Euro area economy and discusses implications for models of heterogeneous expectation formation. Disagreement varies over time and is strongly counter-cyclical. Disagreement is positively correlated with...
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