Interpreting the term structure of interest rates

Interest rates ; Government securities

The recession, the recovery, and the productivity slowdown

Business cycles ; Economic conditions - United States ; Econometric models ; Gross national product ; Recessions ; Labor productivity

Monetary policy and long-term real interest rates

Interest rates ; Monetary policy - United States

Monetary policy in a low inflation regime

Inflation (Finance) ; Monetary policy - United States

Adapting to instability in money demand: forecasting money growth with a time-varying parameter model

Conventional money demand models appear to be unstable, and this complicates the problem of conducting monetary policy. One way to deal with parameter instability is to learn how to adapt quickly when parameters shift. This paper applies a time-varying-parameter estimator to conventional money demand models and evaluates its usefulness as a forecasting tool. In relative terms, the time-varying-parameter estimator improves significantly on ordinary least squares. In absolute terms, we continue to have difficulty tracking money demand through turbulent periods.Monetary policy - United States ; Money theory ; Demand for money

Commentary on "Optimal monetary policy under uncertainty: a Markov jump-linear-quadratic approach"

Monetary policy ; Econometric models

Should the central bank be responsible for regional stabilization?

Regional economics ; Monetary policy - United States ; California ; Economic stabilization

The conquest of U.S. inflation: learning and robustness to model uncertainty

Previous studies have interpreted the rise and fall of U.S. inflation after World War II in terms of the Fed's changing views about the natural rate hypothesis but have left an important question unanswered. Why was the Fed so slow to implement the low-inflation policy recommended by a natural rate model even after economists had developed statistical evidence strongly in its favor? Our answer features model uncertainty. Each period a central bank sets the systematic part of the inflation rate in light of updated probabilities that it assigns to three competing models of the Phillips curve. Cautious behavior induced by model uncertainty can explain why the central bank presided over the inflation of the 1970s even after the data had convinced it to place much the highest probability on the natural rate model. JEL Classification: E31, E58, E65anticipated utility, Bayes' law, natural unemployment rate, Phillips curve, Robustness