The Great Inflation and the Greenbook

Giacomo Carboni and Martin Ellison

Journal of Monetary Economics, 2009, vol. 56, issue 6, 831-841

Abstract: Can the story of evolving Federal Reserve beliefs in The Conquest of American Inflation simultaneously explain the Great Inflation and the forecasts published in the Greenbook during that time? If Sargent is correct then evolving beliefs should be reflected not only in policy outcomes but also in Greenbook forecasts. In this paper they are. By conditioning on the Greenbook, it is show that both inflation outcomes and Greenbook forecasts can be rationalised by evolving beliefs. The results improve on recent empirical evidence that has been criticised for relying on unrealistic beliefs that produce forecasts inconsistent with the Greenbook.

Keywords: Great; Inflation; Greenbook; Learning; Monetary; policy (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:6:p:831-841

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