Monetary Policy, Inflation Target, and the Great Moderation: An Empirical Investigation

Qazi Haque

International Journal of Central Banking, 2022, vol. 18, issue 4, 1-52

Abstract: This paper estimates a New Keynesian model with trend inflation and contrasts Taylor rules featuring fixed versus timevarying inflation target. The estimation is conducted over the Great Inflation and the Great Moderation periods, while allowing for indeterminacy. Time-varying inflation target empirically fits better and active monetary policy prevails in both periods, thereby ruling out sunspots as an explanation of the Great Inflation episode.

JEL-codes: C11 C52 C62 E31 E32 E52 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Monetary policy, inflation target and the great moderation: An empirical investigation (2019)
Working Paper: Monetary Policy, Inflation Target and the Great Moderation: An Empirical Investigation (2019)
Working Paper: Monetary Policy, Inflation Target and the Great Moderation: An Empirical Investigation (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2022:q:4:a:6

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