Monetary Policy Regimes and Beliefs
By David Andolfatto, Paul Gomme. 2003
111 citations recorded by the source corpus.
Recent monetary history has been characterized by monetary authorities that appear to shift periodically between distinct policy regimes associated with higher or lower average rates of money creation. As policy regimes are not directly observable and as the rate of monetary expansion varies for reasons other than regime changes, the general public must form beliefs over current monetary policy based on historical realizations of money growth rates. Depending on the parameters governing the behaviour of monetary policy, beliefs (and therefore inflation forecasts) may evolve very slowly in the wake of actual regime changes, thereby exacerbating the costs of a disinflation policy. The quantitative importance of slowly adjusting beliefs is evaluated in the context of a computable general equilibrium model.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/3b47a7d63032b368439ada5265db512683a78d27
Citations in the corpus
- Fluctuating Macro Policies and the Fiscal Theory [with Comments and Discussion] (2005, unknown): “Some work considers recurring regime switching in exogenous processes, including exogenously evolving policy variables [Andolfatto and Gomme (2003), Davig (2003, 2004), Leeper and Zha (2003), Schorfheide (2005)].”
- Monetary-Fiscal Policy Interactions and Fiscal Stimulus (2011, unknown): “2 Work along these lines includes Andolfatto and Gomme (2003), Leeper and Zha (2003), Davig (2004), Davig and Leeper (2006, 2007), Chung et al. (2007), Svensson and Williams (2007), Bianchi (2009), and Farmer et al. (2009).”
- Monetary and Fiscal Policy Switching (2007, unknown): “There is work that models on-going regime change [Andolfatto and Gomme (2003), Davig (2002, 2003), Leeper and Zha (2003), Schorfheide (2003), and Andolfatto, Hendry, and Moran (2002)].”
- Learning and Monetary Policy Shifts (2003, unknown): “Our findings with respect to the effects of a disinflation policy in the ‘learning’ and ‘full-information’ environment, by and large, resemble the results reported by Andolfatto and Gomme (2003).”