The Role of Policymakers in Business Cycle

"The book's central theme is that a policymaker's role is to enhance the public's ability to coordinate its price information price expectations, and economic activities. The role is fulfilled when policymakers maintain inflation stability."--BOOK JACKET.

List of Figures

xiii

List of Tables

xvii

Preface

xix

I The Interaction of Policy and Outcomes

Coordinating Price Information

3

(24)

Features of the Book

11

(6)

Related Work

17

(3)

The Plan of the Book

20

(7)

Outcomes and Policy: An Illustration

27

(53)

Inflation-Output Costabilization: The Data

29

(19)

Inflation Volatility

31

(3)

Output Volatility

34

(4)

Data on Inflation Uncertainty

38

(10)

Inflation-Stabilization Policy and IOCS

48

(6)

Policymakers and Information Coordination

51

(3)

Policy Indicators

54

(19)

The Federal Funds Rate Ratio

56

(6)

The Taylor Rule

62

(5)

Taylor Principle Deviations

67

(6)

The Interest Rate Volatility and IOCS Trade-Off

73

(2)

Summary

75

(5)

Policy Evolution: 1960 to 2000

80

(35)

The 1960s: Deemphasizing Inflation Stability

83

(9)

The 1970s: Inflation Instability and Stagflation

92

(8)

The 1980s: Inflation Stability Reemphasized

100

(5)

The 1990s: Continuity and Preemption

105

(4)

Summary

109

(6)

II The Role of Policymakers

The Theoretical Model

115

(21)

Price Level Adjustment

116

(3)

Aggregate Demand

119

(1)

The Policy Rule

120

(15)

Implementation

123

(1)

The Taylor Rule: Structure and Development

124

(11)

Summary

135

(1)

Policy and Aggregate Variability

136

(17)

Feasibility

137

(4)

Equilibrium Inflation and Alternative Target Mixes

138

(2)

Equilibrium Output and Alternative Target Mixes

140

(1)

Aggregate Variability

141

(2)

The Policy Rule and Inflation Variability

143

(3)

The Crossover Effect of Output Targeting (CEOT)

144

(2)

The Policy Rule and Output Variability

146

(1)

The Crossover Effect of Inflation Targeting (CEIT)

146

(1)

Summary

147

(2)

Appendix to Chapter 5

149

(4)

Solving the System

149

(4)

The Optimal Policymaker Role

153

(24)

Optimal Policy Target Emphasis

156

(5)

Regime and Preference Shifts and IOCS

161

(7)

Feasible Policy Weight Ranges

164

(4)

IOCS in the Presence of Exogenous Shocks

168

(1)

Summary

169

(1)

Appendix to Chapter 6

170

(7)

The Interest Rate Volatility and IOCS Trade-Off: A Test

170

(7)

III Coordination Dynamics

Coordinating Inflation Forecasts

177

(41)

Empirical Implications of the Theoretical Model

181

(3)

The Relative-Real-Wage Contract Specification

184

(4)

The IS Specification

186

(1)

The Taylor Rule

187

(1)

Stability Analysis

188

(6)

The Equilibrium Inflation Rate

188

(3)

Expectational Stability

191

(3)

Policy and Inflation Dynamics

194

(4)

Inflation Persistence

194

(1)

Inflation Volatility

195

(3)

Tests

198

(13)

Estimates of Inflation Persistence

199

(2)

The Appropriate Structural Break and Policy Effectiveness

201

(5)

Estimates of Inflation Persistence and Volatility

206

(5)

Summary

211

(2)

Appendix to Chapter 7

213

(5)

A Brief Summary of the Adaptive Learning Approach

213

(5)

Inflation-Stabilizing Policy: Robustness

218

(15)

The Model

219

(3)

Determinacy

222

(3)

Adaptive Learning by Agents

225

(4)

Model Illustrations

229

(3)

Learning Dynamics

229

(2)

Inflation Persistence

231

(1)

Summary

232

(1)

Conclusion and Implications

233

(18)

Implications for Policymakers

240

(5)

Institutional Reform and Information Coordination

241

(4)

Implications for Future Research

245

(4)

The Need for Comparative Analysis

245

(1)

The Effect of Political and Social Forces on Policy

246

(2)

Long-Term Consequences

248

(1)

Final Thoughts

249

(2)

References

251

(26)

Index

277

What is included with this book?

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

The Role of Policymakers in Business Cycle Fluctuations

Summary

Table of Contents

Supplemental Materials

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

The Role of Policymakers in Business Cycle Fluctuations

Summary

Table of Contents

Supplemental Materials

Digital License