Output sensitivity of monetary policy and macroeconomic performance
Employing dynamic panel estimation techniques we derive an empirical measure of central banks' degree of output sensitivity. When relating this measure to macroeconomic outcome variables, we find that a decrease in output sensitivity results in larger business-cycle movements and higher medium-term inflation uncertainty. However, the level of inflation is decreased and the output gap is increased.
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Volume (Year): 19 (2012)
Issue (Month): 15 (October)
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