Monetary policy and learning: Some implications for policy and research
AbstractIn March 2003 the Federal Reserve Bank of Atlanta hosted a conference focusing on the relationship between monetary policy and learning. The conference papers and discussions are part of an emerging literature that introduces learning-about the economy or the model used by policymakers-into dynamic macroeconomic models. In some models, monetary policymakers learn about how the economy works while in others private agents learn about the model(s) the central bank uses to formulate monetary policy. ; This article outlines key issues, raised in a 1999 book by Thomas Sargent, about how to interpret monetary policy behavior and economic performance over the past thirty years using the Phillips curve framework and different assumptions about learning. To a large extent, several conference papers follow from Sargent's work. Some conference papers focus on understanding recent inflation history, attempting to detect monetary policy's role in generating the recent, more benign inflation performance. Other conference papers investigate the role of learning behavior in a variety of settings. The article outlines the implications from some of the papers. ; Finally, the article describes economic literature relating to central bank transparency, its relevance for effective communication to the public about monetary policy, and its likely role in future learning models. Through the transparency discussion, the article foreshadows Lars Svensson's keynote address at the conference (reprinted here), citing it as a "suggested user's guide for monetary policymakers to improve policy effectiveness."
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Atlanta in its journal Economic Review.
Volume (Year): (2003)
Issue (Month): Q3 ()
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Romer, Christina D. & Romer, David H., 1994. "Monetary policy matters," Journal of Monetary Economics, Elsevier, vol. 34(1), pages 75-88, August.
- Timothy Cogley & Thomas Sargent, .
"Drifts and Volatilities: Monetary Policies and Outcomes in the Post WWII US,"
2133503, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Timothy Cogley & Thomas J. Sargent, 2005. "Drift and Volatilities: Monetary Policies and Outcomes in the Post WWII U.S," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(2), pages 262-302, April.
- Timothy Cogley & Thomas J. Sargent, 2003. "Drifts and volatilities: monetary policies and outcomes in the post WWII U.S," Working Paper 2003-25, Federal Reserve Bank of Atlanta.
- Stephen G. Cecchetti & Stefan Krause, 2002. "Central bank structure, policy efficiency, and macroeconomic performance: exploring empirical relationships," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 47-60.
- Christina D. Romer & David H. Romer, 2002.
"The Evolution of Economic Understanding and Postwar Stabilization Policy,"
NBER Working Papers
9274, National Bureau of Economic Research, Inc.
- Christina D. Romer & David H. Romer, 2002. "The evolution of economic understanding and postwar stabilization policy," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 11-78.
- Eric M. Leeper & Tao Zha, 2003.
"Modest policy interventions,"
2003-24, Federal Reserve Bank of Atlanta.
- Eric M. Leeper & Tao Zha, 2002. "Modest Policy Interventions," NBER Working Papers 9192, National Bureau of Economic Research, Inc.
- Eric M. Leeper & Tao Zha, 2002. "Modest policy interventions," Working Paper 2002-19, Federal Reserve Bank of Atlanta.
- Eric M. Leeper & Tao Zha, 1999. "Modest policy interventions," Working Paper 99-22, Federal Reserve Bank of Atlanta.
- Thomas J. Sargent & Noah William, 2005.
"Impacts of Priors on Convergence and Escapes from Nash Inflation,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 8(2), pages 360-391, April.
- Thomas J. Sargent & Noah Williams, 2003. "Impacts of priors on convergence and escapes from Nash inflation," Working Paper 2003-14, Federal Reserve Bank of Atlanta.
- Lars E.O. Svensson, 2003. "Monetary policy and learning," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 11-16.
- Donald L. Kohn & Brian P. Sack, 2003. "Central bank talk: does it matter and why?," Finance and Economics Discussion Series 2003-55, Board of Governors of the Federal Reserve System (U.S.).
- James Bullard & Stefano Eusepi, 2003.
"Did the Great Inflation occur despite policymaker commitment to a Taylor rule?,"
2003-20, Federal Reserve Bank of Atlanta.
- James Bullard & Stefano Eusepi, 2005. "Did the Great Inflation Occur Despite Policymaker Commitment to a Taylor Rule?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(2), pages 324-359, April.
- James B. Bullard & Stefano Eusepi, 2004. "Did the Great Inflation occur despite policymaker commitment to a Taylor rule?," Working Papers 2003-013, Federal Reserve Bank of St. Louis.
- James Bullard & Stefano Eusepi, 2003. "Did the Great Inflation Occur Despite Policymaker Commitment to a Taylor Rule?," Computing in Economics and Finance 2003 129, Society for Computational Economics.
- Marco Del Negro, 2003. "Discussion of Cogley and Sargent's "Drifts and volatilities: Monetary policies and outcomes in the post WWII U.S."," Working Paper 2003-26, Federal Reserve Bank of Atlanta.
- Thomas Sargent & Noah Williams & Tao Zha, 2006.
"The Conquest of South American Inflation,"
NBER Working Papers
12606, National Bureau of Economic Research, Inc.
- Bernanke, Ben S. & Mihov, Ilian, 1998.
"The liquidity effect and long-run neutrality,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 49(1), pages 149-194, December.
- Stefan Krause & Fabio Mendez, 2005.
"Institutions, Arrangements, and Preferences for Inflation Stability: Evidence and Lessons from a Panel Data Analysis,"
0501, Department of Economics, Emory University (Atlanta).
- Krause, Stefan & Méndez, Fabio, 2008. "Institutions, arrangements and preferences for inflation stability: Evidence and lessons from a panel data analysis," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 282-307, March.
- Richard G. Anderson & Kevin L. Kliesen, 2011. "How does the FOMC learn about economic revolutions? evidence from the New Economy Era, 1994-2001," Working Papers 2011-041, Federal Reserve Bank of St. Louis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Meredith Rector).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.