The evolution of U.S. monetary policy: 2000–2007. (English) Zbl 1401.91502
Summary: A vector autoregression with time-varying parameters is used to characterize changes in Federal Reserve policy that occurred from 2000 through 2007 and describe how they affected the performance of the U.S. economy. Declining coefficients in the models estimated policy rule point to a shift in the Feds emphasis away from stabilizing inflation over this period. More importantly, however, the Fed held the federal funds rate persistently below the values prescribed by this rule. Under this more discretionary policy, inflation overshot its target and the funds rate followed a path reminiscent of the “stop-go” pattern that characterized Fed behavior prior to 1979.
MSC:
| 91B84 | Economic time series analysis |
| 91B82 | Statistical methods; economic indices and measures |
| 91B64 | Macroeconomic theory (monetary models, models of taxation) |
Software:
bvarsvReferences:
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