Favero, Carlo A.; Monacelli, Tommaso - 2003
of monetary policy. These models, based on the conventional view that inflation stabilization should be a concern of …-augmented Taylor rule can deliver recurrent mispredictions of inflation in the U.S. before 1987. We then show that a fiscal feed … belonging to the pre-1987 period the model based on the two rules can predict the behavior of inflation better than the one …
