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The dynamics of US inflation: Can monetary policy explain the changes?

Fabio Canova () and Filippo Ferroni ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We investigate the relationship between monetary policy and inflation dynamics in the US using a medium scale structural model. The specification is estimated with Bayesian techniques and fits the data reasonably well. Policy shocks account for a part of the decline in inflation volatility; they have been less effective in triggering inflation responses over time and qualitatively account for the rise and fall in the level of inflation. A number of structural parameter variations contribute to these patterns.

Keywords: New Keynesian model; Bayesian methods; Monetary policy; Inflation dynamics. (search for similar items in EconPapers)
JEL-codes: E52 E47 C53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2010-06
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Journal Article: The dynamics of US inflation: Can monetary policy explain the changes? (2012) Downloads
Working Paper: The Dynamics of US Inflation: Can Monetary Policy Explain the Changes?
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