How Credible Is the Federal Reserve? A Structural Estimation of Policy Re-Optimizations

• 成果类型: Article
• 署名作者: Debortoli, Davide; Lakdawala, Aeimit
• 署名单位: Pompeu Fabra University; Barcelona School of Economics; Michigan State University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20150029
• 发表日期: 2016
• 页码: 42-76
• 关键词: central bank preferences; optimal monetary-policy; regime switches; macroeconomic fluctuations; rational-expectations; business cycles; dsge approach; time-series; inflation; MODEL

摘要

The paper proposes a new measure of the degree of credibility of the Federal Reserve. We estimate a medium-scale macroeconomic model, where the central bank has access to a commitment technology, but where a regime-switching process governs occasional re-optimizations of announced plans. The framework nests the commonly used discretion and commitment cases, while allowing for a continuum of intermediate cases. Our estimates reject both full-commitment and discretion. We instead identify occasional re-optimization episodes both before and during the Great Moderation period. Finally, through counterfactual analyses we assess the role of credibility over the past four decades.