Monetary policy regimes and beliefs

David Andolfatto () and Paul Gomme

No 9905, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Revised. This paper investigates the role of beliefs over monetary policy in propagating the effects of monetary policy shocks within the context of a dynamic, stochastic general equilibrium model. In this model, monetary policy periodically switches between low- and high-money-growth regimes. When individuals cannot observe the regime directly, they must draw inferences over regime type based on historical money growth rates. The authors show that for an empirically plausible money growth process, beliefs evolve slowly in the wake of a regime change. As a result, their model is able to capture some of the observed persistence of real and nominal variables following such a regime change.

Keywords: Monetary; policy (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-dge and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.26509/frbc-wp-199905R Persistent link
https://www.clevelandfed.org/-/media/project/cleve ... -and-beliefs-pdf.pdf Full text (application/pdf)

Related works:
Journal Article: Monetary Policy Regimes and Beliefs (2003)
Working Paper: Monetary Policy Regimes and Beliefs (2001)
Working Paper: Monetary policy regimes and beliefs (1997)
Working Paper: Monetary Policy Regimes and Beliefs (1997)
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:fedcwp:9905

Ordering information: This working paper can be ordered from

DOI: 10.26509/frbc-wp-199905R

Access Statistics for this paper

More papers in Working Papers (Old Series) from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().