Modeling changes in US monetary policy with a time-varying nonlinear Taylor rule

Monetary Policy and the Great Inflation: A Multi-Country Time-Varying Analysis Using the Taylor Rule

This paper is motivated by the observation that the Great Inflation, i.e., the high and volatile inflation that developed in the mid 1960s and lasted for almost twenty years, was an international phenomenon. Given that observation, we argue that an explanation for the Great Inflation should be consistent with the timing of the events in many developed countries, and not only with the US. We pro...

Time-Varying Monetary Policy Reaction Function: The Case of Iran

Monetary policy and stability during six periods in US economic history: 1959ヨ2008: a novel, nonlinear monetary policy rule

We investigate the monetary policy of the Federal Reserve Board during six periods in US economic history 1959–2008. In particular, we examine the Fed’s response to changes in three guiding variables: inflation, π, unemployment, U, and industrial production, y, during periods with low and high economic stability. We identify separate responses for the Fed’s change in interest rate depending upo...

Historical monetary policy analysis and the Taylor rule

This study examines the usefulness of the Taylor-rule framework as an organizing device for describing the policy debate and evolution of monetary policy in the United States. Monetary policy during the 1920s and since the 1951 Treasury-Federal Reserve Accord can be broadly interpreted in terms of this framework with rather surprising consistency. In broad terms, during these periods policy has...

How stable are monetary policy rules: estimating the time-varying coefficients in monetary policy reaction function for the US

We consider the relation among the federal funds rate and the Federal Reserve’s expectations for future inflation, the future gap between actual and potential output, and the future foreign exchange value of the U.S. dollar. The coefficients of this relation are biased when relevant explanatory variables are omitted and/or when the included explanatory variables are measured with error. This pr...