Measuring Inflation Pressure and Monetary Policy Response: A General Approach Applied to US Data 1966 - 2001

Diana Weymark () and Mototsugu Shintani

No 424, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: We propose a methodology for constructing operational indices of inflation pressure, the monetary authority's effort to reduce this pressure, and the degree to which inflation pressure is alleviated. We begin with model independent definitions of these concepts. When our definitions are applied to a specific model we obtain model-specific functional forms for these indices. We apply our methodology to a micro-founded aggregate model with rational expectations. GMM estimates of the model are used to obtain quarterly time series of our indices for the United States from 1966 to 2001.

Keywords: Inflation pressure; monetary policy; stabilization policy (search for similar items in EconPapers)
JEL-codes: E50 E58 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0424

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