Economics, Econometrics and Finance
2 years ago

Monetary policy shift slashes inflation persistence, reshaping economic landscape.

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Manchester School
Inflation persistence and monetary policy: DSGE‐VAR approach
Kuo‐Hsuan Chin

Paper Summary

The researchers used a DSGE-VAR approach to study U.S. inflation persistence over different time periods. They found that inflation persistence decreased in the early 1980s due to changes in monetary policy, specifically a more aggressive approach.

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