Changes in the Federal Reserve's inflation target: causes and consequences

Peter Ireland

No 05-13, Working Papers from Federal Reserve Bank of Boston

Abstract: This paper estimates a New Keynesian model to draw inferences about the behavior of the Federal Reserve?s unobserved inflation target. The results indicate that the target rose from 1- 1/4 percent in 1959 to over 8 percent in the mid-to-late 1970s before falling back below 2-1/2 percent in 2004. The results also provide some support for the hypothesis that over the entire postwar period, Federal Reserve policy has systematically translated short-run price pressures set off by supply-side shocks into more persistent movements in inflation itself, although considerable uncertainty remains about the true source of shifts in the inflation target.

Keywords: Inflation (Finance); Monetary policy (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-cba, nep-his, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.bostonfed.org/economic/wp/wp2005/wp0513.htm (text/html)
http://www.bostonfed.org/economic/wp/wp2005/wp0513.pdf (application/pdf)

Related works:
Journal Article: Changes in the Federal Reserve's Inflation Target: Causes and Consequences (2007)
Journal Article: Changes in the Federal Reserve's Inflation Target: Causes and Consequences (2007)
Working Paper: Changes in the Federal Reserve's Inflation Target: Causes and Consequences (2006)
Working Paper: Changes in the Federal Reserve’s Inflation Target: Causes and Consequences (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:05-13

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().