Economics, Econometrics and Finance
6 years ago

Monetary policy drives decline in inflation volatility, stabilizes output growth

RePEc: Research Papers in Economics
Monetary Policy, Inflation Target and the Great Moderation: An Emperical Investigation
Qazi Haque

Paper Summary

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The study looked at how monetary policy and inflation targets affected economic stability over time. By analyzing data from periods of high and low inflation, researchers found that having a flexible inflation target and active monetary policy helped reduce economic volatility. This means that changes in how central banks set interest rates and control inflation have played a significant role in stabilizing the economy.