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The Evolution of the Fed's Inflation Target in an Estimated Model under RE and Learning

  • Fabio Milani


    (Department of Economics, University of California-Irvine)

This paper aims to infer the evolving Fed's inflation target by estimating a monetary model under the assumptions of RE and learning. The results emphasize how different assumptions about expectations may have important effects on the inferred target movements.

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Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 060704.

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Length: 11 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:irv:wpaper:060704
Contact details of provider: Postal: Irvine, CA 92697-3125
Phone: (949) 824-5788
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  1. Thomas Sargent & Noah Williams & Tao Zha, 2006. "The Conquest of South American Inflation," NBER Working Papers 12606, National Bureau of Economic Research, Inc.
  2. Milani, Fabio, 2006. "A Bayesian DSGE Model with Infinite-Horizon Learning: Do "Mechanical" Sources of Persistence Become Superfluous?," MPRA Paper 809, University Library of Munich, Germany.
  3. Peter N. Ireland, 2005. "Changes in the Federal Reserve's inflation target: causes and consequences," Working Papers 05-13, Federal Reserve Bank of Boston.
  4. Anatoliy Belaygorod & Michael J. Dueker, 2005. "Discrete monetary policy changes and changing inflation targets in estimated dynamic stochastic general equilibrium models," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 719-34.
  5. Thomas Lubik & Frank Schorfheide, 2002. "Testing for Indeterminacy:An Application to U.S. Monetary Policy," Economics Working Paper Archive 480, The Johns Hopkins University,Department of Economics, revised Jun 2003.
  6. Surico, Paolo, 2003. "Measuring the time-inconsistency of US monetary policy," Working Paper Series 0291, European Central Bank.
  7. Daniel Leigh, 2005. "Estimating the Implicit Inflation Target: An Application to U.S. Monetary Policy," IMF Working Papers 05/77, International Monetary Fund.
  8. Milani, Fabio, 2008. "Learning, monetary policy rules, and macroeconomic stability," Journal of Economic Dynamics and Control, Elsevier, vol. 32(10), pages 3148-3165, October.
  9. Fabio Milani, 2005. "Expectations, Learning and Macroeconomic Persistence," Macroeconomics 0510022, EconWPA.
  10. Fabio Milani, 2005. "Adaptive Learning and Inflation Persistence," Working Papers 050607, University of California-Irvine, Department of Economics.
  11. Branch, William A. & Evans, George W., 2006. "A simple recursive forecasting model," Economics Letters, Elsevier, vol. 91(2), pages 158-166, May.
  12. Richard Dennis, 2002. "Inferring policy objectives from policy actions," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue apr5.
  13. Giorgio Primiceri, 2005. "Why Inflation Rose and Fell: Policymakers' Beliefs and US Postwar Stabilization Policy," NBER Working Papers 11147, National Bureau of Economic Research, Inc.
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