The Evolution of U.S. Monetary Policy: 2000 - 2007

Michael Belongia and Peter Ireland

No 22693, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A vector autoregression with time-varying parameters is used to characterize changes in Federal Reserve policy that occurred from 2000 through 2007 and describe how they affected the performance of the U.S. economy. Declining coefficients in the model’s estimated policy rule point to a shift in the Fed’s emphasis away from stabilizing inflation over this period. More importantly, however, the Fed held the federal funds rate persistently below the values prescribed by this rule. Under this more discretionary policy, inflation overshot its target and the funds rate followed a path reminiscent of the "stop-go" pattern that characterized Fed behavior prior to 1979.

JEL-codes: C32 E31 E32 E37 E52 E58 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Michael T. Belongia & Peter N. Ireland, 2016. "The evolution of U.S. monetary policy: 2000–2007," Journal of Economic Dynamics and Control, vol 73, pages 78-93.

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Related works:
Journal Article: The evolution of U.S. monetary policy: 2000–2007 (2016)
Working Paper: The Evolution of US Monetary Policy: 2000-2007 (2015)
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