What Explains the Varying Monetary Response to Technology Shocks in G-7 Countries?

Neville R. Francis, Michael Owyang and Athena T. Theodorou
Additional contact information
Neville R. Francis: Department of Economics, University of North Carolina
Athena T. Theodorou: Planning Department, Cyprus Tourism Organization

International Journal of Central Banking, 2005, vol. 1, issue 3

Abstract: In a recent paper, Galí, López-Salido, and Vallées (2003) examined the Federal Reserve’s response to VAR-identified technology shocks. They found that during the Martin-Burns- Miller era, the Federal Reserve responded to technology shocks by overstabilizing output, while in the Volcker-Greenspan era, the Federal Reserve adopted an inflation-targeting rule. We extend their analysis to countries of the G-7; moreover, we consider the factors that may contribute to differing monetary responses across countries. Specifically, we find a relationship between the volatility of capital investment, the type of monetary policy rule, the responsiveness of the rule to output and inflation fluctuations, and the response to technology shocks.

JEL-codes: C32 E2 E52 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (15)

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Related works:
Working Paper: What explains the varying monetary response to technology shocks in G-7 countries? (2005)
Working Paper: What Explains the Varying Monetary Response to Technology Shocks in G-7 Countries? (2005)
Working Paper: What Explains the Varying Monetary Response to Technology SHocks in G7-Countries (2004)
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