Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/100712
Authors: 
Bullard, James
Eusepi, Stefano
Year of Publication: 
2003
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2003-20
Abstract: 
The authors study the hypothesis that misperceptions of trend productivity growth during the onset of the productivity slowdown in the United States caused much of the great inflation of the 1970s. They use the general equilibrium, sticky price framework of Woodford (2002), augmented with learning using the techniques of Evans and Honkapohja (2001). The authors allow for endogenous investment as well as explicit, exogenous growth in productivity and the labor input. They assume the monetary policymaker is committed to using a Taylor-type policy rule. The authors study how this economy reacts to an unexpected change in the trend productivity growth rate under learning. They find that a substantial portion of the observed increase in inflation during the 1970s can be attributed to this source.
Subjects: 
Equilibrium (Economics)
Monetary policy
Macroeconomics
Inflation (Finance)
Productivity
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.