 IntroductionChapter Chapter 1 in The Yield Curve and Financial Risk Premia, 2011, pp 1-6 from Springer Abstract: Abstract One striking feature since the 1980s has been an observed trend decline in macroeconomic volatility for most industrialized countries. Standard deviations of output and inflation have significantly fallen with the timing of occurrence varying across countries. However, the phenomenon has been so pronounced that it has been labeled the “Great Moderation” (Blanchard and Simon, 2001; Bernanke, 2004c). Apart from the “good luck” hypothesis, the “good policy” approach, with an improved performance of macroeconomic policy, has been promoted as a major contributor to increased economic stability. This stylized fact has been accompanied by central banks becoming more independent and more transparent using the channel of communication and adopting some variants of the inflation targeting framework. The argument relies on the proposition that the commitment to deliver price stability in the medium term has promoted an environment of increased predictability of monetary policy thereby reducing overall macroeconomic uncertainty. Keywords: Interest Rate; Monetary Policy; Central Bank; Asset Price; Risk Premia (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-642-21575-9_1 Ordering information: This item can be ordered from DOI: 10.1007/978-3-642-21575-9_1 Access Statistics for this chapter More chapters in Lecture Notes in Economics and Mathematical Systems from Springer |
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