information about aggregate technology shocks that influence the future ... monetary policy rule, making it hard for firms to tell these two shocks apart. ... more than five years.1 State-of-the-art perfect information models are shown to have too we
nous variables: output gap, inflation and nominal interest rates. The model we ... this would imply that the central bank responds to all of these disturbances in order to keep output at its .... is comfortably higher than any empirical estimate.
This paper reviews alternative options for monetary policy when the short- .... of a short-term Treasury security with newly created base money represents an ...... long-term Treasuries, the 10-year T-bond and the Aaa and Baa corporate yields ..... o
Mar 13, 2014 - that effect, we first document some asymmetries in the cyclical behavior of key macroeco- ... In line with the key tenet of prospect theory, losses in .... a smooth indicator of the level of the economic activity. We denote such indica