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rate smoothing and no response to the growth rate, as distinct from the level, of output are more robust. Robustness can be …
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strongly in its favor? Our answer features model uncertainty. Each period a central bank sets the systematic part of the … behavior induced by model uncertainty can explain why the central bank presided over the inflation of the 1970s even after the …
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estimated or calibrated for alternative identification approaches. These differences also translate into uncertainty about the …
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and lagged output gaps are not robust. Some degree of robustness can be recovered by using rules without interest … effective strategy for improving the robustness of policy rules. …
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The dynamic stochastic general equilibrium (DSGE) models used to study business cycles typically assume that exogenous disturbances are independent first-order autoregressions. This paper relaxes this tight and arbitrary restriction by allowing for disturbances that have a rich contemporaneous...
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