Technology shocks and monetary policy : Revisiting the Fed's performance
Matheron, Julien; Avouyi-Dovi, Sanvi (2007), Technology shocks and monetary policy : Revisiting the Fed's performance, Journal of money, credit and banking, 39, 2-3, p. 471-507. http://dx.doi.org/10.1111/j.0022-2879.2007.00033.x
TypeArticle accepté pour publication ou publié
Journal nameJournal of money, credit and banking
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Abstract (EN)Would the U.S. economy's dynamic response to permanent technology shocks have been different from the actual responses if monetary authorities' systematic response to these shocks had been optimal ? To answer this question, we characterize the dynamic effects of permanent technology shocks and the way in which U.S. monetary authorities reacted to these shocks over the sample 1955(1)-2002(4) using a structural VAR. A sticky price-sticky wage model is developed and estimated to reproduce these responses. We then formally compare these responses with the outcome of the optimal monetary policy.
Subjects / KeywordsSticky prices and wages; Taylor rule; Optimal monetary policy
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