The Evolution of US Monetary Policy: 2000-2007

Michael Belongia and Peter Ireland

No 882, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper estimates a VAR with time-varying parameters to characterize the changes in Federal Reserve policy that occurred from 2000 through 2007 and assess how those changes affected the performance of the U.S. economy. The results point to a gradual shift in the Fed's emphasis over this period, away from stabilizing inflation and towards stabilizing output. A persistent deviation of the federal funds rate from the settings prescribed by the estimated monetary policy rule appears more important, however, in causing inflation to overshoot its target in the years leading up to the Great Recession.

Keywords: Federal Reserve; Monetary Policy; Bayesian VAR; Time-Varying Parameters (search for similar items in EconPapers)
JEL-codes: C32 E31 E32 E37 E52 E58 (search for similar items in EconPapers)
Date: 2015-08-07
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The evolution of U.S. monetary policy: 2000–2007 (2016)
Working Paper: The Evolution of U.S. Monetary Policy: 2000 - 2007 (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:882

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