Indeterminacy and learning: An analysis of monetary policy in the Great Inflation

• 成果类型: Article
• 署名作者: Lubik, Thomas A.; Matthes, Christian
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Richmond
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2016.07.006
• 发表日期: 2016
• 页码: 85-106
• 关键词: Federal reserve; Great Moderation; Bayesian estimation; Least squares learning

摘要

The Great Inflation of the 1970s can be understood as the result of equilibrium indeterminacy in which loose monetary policy engendered excess volatility in macroeconomic aggregates and prices. The Federal Reserve inadvertently pursued policies that were not anti-inflationary enough because it did not fully understand the economic environment it was operating in. Specifically, it had imperfect knowledge about the structure of the economy and was subject to data misperceptions. The combination of learning about the economy and the use of mis-measured data resulted in policies, which the Federal Reserve believed to be optimal, but when implemented led to equilibrium indeterminacy. (C) 2016 Elsevier B.V. All rights reserved.