Monetary Policy Credibility and the Unemployment-Inflation Tradeoff: Some Evidence From 17 Industrial Countries
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Summary:
Using data on long-term interest rates for 17 industrial countries, this paper develops some simple measures of monetary policy credibility and then tests if such measures improve the out-of-sample forecasts of conventional models of the inflation-unemployment process. The results provide some evidence in favor of the Lucas critique by showing that the short-run unemployment-inflation trade-off tends to improve in countries that are successful in providing low and stable inflation.
Series:
Working Paper No. 2002/220
Subject:
Financial services Inflation Inflation targeting Labor Long term interest rates Monetary policy Prices Real interest rates Unemployment
English
Publication Date:
December 1, 2002
ISBN/ISSN:
9781451875218/1018-5941
Stock No:
WPIEA2202002
Pages:
39
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