Superneutrality in postwar economies
James Bullard and
No 1994-011, Working Papers from Federal Reserve Bank of St. Louis
A structural vector autoregression is employed to estimate the real output level response to permanent inflation shocks. We identify the model by assuming that in the long run, inflation is a monetary phenomenon. Well-known economic theory is used to establish this identification restriction. The model is estimated for a sample of 16 countries from the larger pool based on data quality, existence of long uninterrupted series on output and inflation, and evidence that the country experienced permanent shocks to inflation and output. The VAR is estimated for each country separately. We find some evidence of non-superneutrality, particularly for some low inflation countries, but in general our results suggest that superneutrality describes well most of the postwar economies we study.
Keywords: Regression; analysis (search for similar items in EconPapers)
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Published in Journal of Monetary Economics, December 1995
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:1994-011
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