Please use this identifier to cite or link to this item:
https://hdl.handle.net/10419/64475
Full metadata record
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Kiefer, David | en |
dc.date.accessioned | 2011-08-19 | - |
dc.date.accessioned | 2012-09-28T12:40:20Z | - |
dc.date.available | 2012-09-28T12:40:20Z | - |
dc.date.issued | 2011 | - |
dc.identifier.uri | http://hdl.handle.net/10419/64475 | - |
dc.description.abstract | Carlin and Soskice (2005) advocate a 3-equation model of stabilization policy, the IS-PC-MR model. Their third equation is the monetary reaction rule MR derived by assuming that governments have performance objectives, but are constrained by an augmented Phillips curve PC. Central banks achieve their preferred outcome by setting interest rates along an IS curve. We simplify their model to 2 equations (PC and MR), developing a state space econometric specification of this solution, and adding a random walk model of unobserved potential growth. Applying this model to a panel of North Atlantic countries, we find it historically consistent with an inflation target of about 4%. Significant interdependence is found in the between-country covariance of inflation and growth shocks, but not of potential output. Beginning with the approximation that expected inflation is the most recent observation, we extend the model to introduce alternative assumptions about expectations with mixed results, support for the stickyprice model, but doubts about activist policy. | en |
dc.language.iso | eng | en |
dc.publisher | |aThe University of Utah, Department of Economics |cSalt Lake City, UT | en |
dc.relation.ispartofseries | |aWorking Paper |x2011-15 | en |
dc.subject.jel | E61 | en |
dc.subject.jel | E63 | en |
dc.subject.ddc | 330 | en |
dc.subject.keyword | new Keynesian policy | en |
dc.subject.keyword | inflation targets | en |
dc.subject.keyword | expectations | en |
dc.title | Stabilization and expectations in a state space model of interconnected economies, a dynamic panel study | - |
dc.type | Working Paper | en |
dc.identifier.ppn | 666400598 | en |
dc.rights | http://www.econstor.eu/dspace/Nutzungsbedingungen | en |
Files in This Item:
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.