Monetary policy rules and the Great Inflation
The nature of monetary policy during the 1970s is evaluated through the lens of a forward-looking Taylor rule based on perceptions regarding the outlook for inflation and unemployment at the time policy decisions were made. The evidence suggests that policy during the 1970s was essentially indistinguishable from a systematic, activist, forward-looking approach such as is often identified with good policy advice in theoretical and econometric policy evaluation research. This points to the unpleasant possibility that the policy errors of the 1970s occurred despite the use of a seemingly desirable policy approach. Though the resulting activist policies could have appeared highly promising, they proved, in retrospect, counterproductive.
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- Orphanides, Athanasios, 2002.
"Activist stabilization policy and inflation: The Taylor rule in the 1970s,"
CFS Working Paper Series
2002/15, Center for Financial Studies (CFS).
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- repec:oup:qjecon:v:115:y:2000:i:1:p:147-180 is not listed on IDEAS
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"Monetary Policy Rules, Macroeconomic Stability, and Inflation: A View from the Trenches,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 36(2), pages 151-75, April.
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- Athanasios Orphanides, 2001. "Monetary policy rules, macroeconomic stability and inflation: a view from the trenches," Finance and Economics Discussion Series 2001-62, Board of Governors of the Federal Reserve System (U.S.).
- Athanasios Orphanides, 2001.
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American Economic Review,
American Economic Association, vol. 91(4), pages 964-985, September.
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81, Federal Reserve Bank of St. Louis.
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Working Paper Series
93, Sveriges Riksbank (Central Bank of Sweden).
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