Estimating a forward-looking Federal Reserve policy rule separately for 1960-79 and 1979-96, this paper finds that the Fed let real short-term rates fall as expected inflation rose before Volcker, but …
PublishedClassicJournal of Economic LiteraturePublished Dec 1999
This widely cited survey derives monetary policy design from a simple forward-looking New Keynesian model, showing that optimal policy without commitment requires raising the nominal rate more than …