American Economic Review Vol. 100 No. 1 2010
Monetary Policy Rules and Macroeconomic Stability: Some New Evidence
Abstract
I revisit the question of indeterminacy in US monetary policy using limited-information identification-robust methods. I find that the conclusions of Clarida, Galí, and Gernter (2000) that policy was inactive before 1979 are robust, but the evidence over the Volcker-Greenspan periods is inconclusive. I show that this is in fact consistent with policy being active over that period. Problems of identification also arise because policy reaction has been more gradual recently. At a methodological level, the paper demonstrates that identification issues should be taken seriously, and that identification-robust methods can be informative even when they produce wide confidence sets. (E31, E32, E52, E65,)
- DOI
- 10.1257/aer.100.1.491
- Volume
- 100
- Issue
- 1
- Pages
- 491-503
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex